Cashback Mortgages
This type of mortgage arrangement means that you receive a cash sum once your purchase has been completed and your mortgage is in place. This incentive sometimes requires the borrower to have a current or savings account with the lender. The amount you receive is normally expressed as a percentage of the amount you have borrowed and is designed to help out with costs associated with moving house.
Cashback Amounts
The cashback amount is totally dependant on the lender's requirements; it might be a fixed and final amount or sometimes it is calculated as a percentage of the total mortgage advance and will therefore fluctuate in value. It is essential that you already hold a current account with specific lenders before you can qualify for cashback.
Cashback mortgages are typically associated with SVR or tracker mortgages, although the rate of interest may or may not be higher. As well as applying an early repayment charge, if a cashback mortgage is redeemed before the end of the agreed term, the lender may ask the borrower to repay all or part of the cashback.
A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.
The Financial Conduct Authority does not regulate most forms of buy to let mortgage.