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Cashback mortgages are a type of mortgage where the lender agrees to give you a cash lump sum when you complete your mortgage deal. The amount of cash you receive could either be a small percentage of your mortgage or a flat fee.
The main benefit of a cashback mortgage is that it can help you to cover the costs of moving home or make some much-needed home improvements. That being said, it’s important to note that cashback mortgages can have higher interest rates than other types of mortgages and often include early repayment fees, so it’s important to compare the different deals on the market before you apply.
If you’re thinking of taking out a cashback mortgage, make sure to speak to a mortgage broker who can help you find the best deal for your individual circumstances. At Echo Finance, our team of mortgage brokers have years of experience helping people to find the right cashback mortgage. We’ll work with you to understand your needs and find a deal that meets your requirements.
To get started, simply give us a call on 0800 0934 914 or fill in our online enquiry form and one of our friendly mortgage brokers will be in touch.
What is a cashback mortgage?
A cashback mortgage is where the lender gives you a lump sum of cash when you take out the loan. The amount of cash you get back depends on the lender and the size of your mortgage, but it can be a great way to get some extra money to help with your moving costs or other expenses.
There are a few things to keep in mind with a cashback mortgage. First, the interest rate is usually higher than a regular mortgage, which means your monthly repayments will be higher as well.
Second, there are typically restrictions such as early repayment charges, so make sure you understand the terms and conditions before you sign on the dotted line.
If you’re looking for a mortgage with some extra upfront cash in your pocket, a cashback mortgage could be a good option for you. Just make sure you compare interest rates and fees before you apply.
How do cashback mortgages work?
The cash lump sum can either be paid as a flat fee or a percentage of the overall mortgage value. For example, if you have a mortgage of £250,000 and the lender offers you 1% cashback, you would receive £2,500. However, if they offered you £1,000 cashback, you would only receive £1,000 regardless of the size of your mortgage.
What are the benefits of cashback mortgages?
The main advantage of a cashback mortgage is that it gives you some extra cash to help with things like home improvements or moving costs.
With that in mind, here are some of the other benefits of cashback mortgages:
- You can use the cash lump sum to cover the costs of moving home or making home improvements.
- The amount of cash you receive is often tax-free.
- You can use the cash to pay off other debts, such as credit card debt or a personal loan.
- You can use the cash to top up your savings account or invest in a stocks and shares ISA.
Disadvantages of cashback mortgages
While there are some advantages to taking out a cashback mortgage, there are also a few things to keep in mind before you apply. First, as we mentioned, the interest rates on these mortgages are often higher than on other types of loans. That means you’ll need to budget carefully to make sure you can afford the monthly mortgage repayments.
Second, most cashback mortgage deals come with early repayment charges. That means if you want to pay off your mortgage early, you may have to pay a penalty fee. So, if you think you might want to sell your home or remortgage within a few years, a cashback mortgage might not be the best option for you.
Finally, it’s important to compare mortgages to make sure you’re getting the best deal. Just because a mortgage comes with cash back doesn’t mean it’s the right mortgage for you. Be sure to compare interest rates, fees, and terms and conditions before you apply.
Should I take mortgage cashback offers into consideration when comparing deals?
Mortgage cashback offers can be a great way to get some extra money when you take out a loan. However, it’s important to compare deals carefully before you apply.
First, make sure you understand the interest rates and fees associated with each mortgage. The interest rate will determine your monthly repayments, so it’s important to find a loan that you can afford.
Second, check for any early repayment charges. These fees can add up, so it’s important to make sure you won’t be penalised if you want to sell your home or remortgage within a few years.
Finally, compare the overall cost of the loan. The size of the cashback bonus shouldn’t be the only factor you consider when choosing a mortgage. Make sure you compare interest rates, fees, and terms and conditions to make sure you’re getting the best deal.
If you’re not sure where to start, our team can help you compare mortgages to find the best cashback mortgages against which you can make an informed decision.
Speak to an expert
If you’re thinking of taking out a cashback mortgage, make sure to speak to one of our team at Echo Finance first. We work with 90+ lenders to find you the best mortgage deal possible. We’ll also give you access to our exclusive mortgage deals that you can’t find on the high street.
We’ll help you compare cashback mortgages and find the right mortgage for your needs. We can also answer any questions you have about how these mortgages work. To speak to one of our team, simply fill in our online enquiry form and we’ll be in touch.
Find your local adviser
Frequently Asked Questions
Below you will find the answers to the questions we hear most often from Echo Finance customers:
A mortgage broker, or a mortgage advisor, is an intermediary who acts as a conduit between an aspiring borrower and a lender. It is their job to provide the mortgage applicant with impartial advice, help them choose the right product and arrange the deal with the lender.
Brokers provide services including advice on which type of mortgage to choose, providing access to exclusive rates through their lender contacts, and application support. Some can offer advice on all areas of the mortgage market, while others specialise in niche fields such as buy-to-let, bad credit, commercial finance, first-time buyers or self-employed borrowers.
People choose to apply for their mortgage through a broker because it can boost their chances of finding the right deal, while saving time and money in the long run.
- Residential mortgages: Everything from fixed-rate to tracker mortgages for first-time buyers, homemovers and remortgage borrowers
- Specialist mortgages: For borrowers who fall outside of standard lending criteria, including people with bad credit, self-employed professionals and more
- Later-life lending: Including advice on equity release, mortgages for pensioners and retirement interest only (RIO) mortgages
- Bridging & Commercial: We have specialist advisors on hand for commercial mortgages, bridging loans, development finance and more
- Insurance & Protection: Including life, home and critical illness cover for families and individuals, as well as landlord and business protection insurance
Echo Finance is regulated by the Financial Conduct Authority and is reviewed annually by an independent compliance company. All of our brokers and advisers hold industry-standard qualifications, such as CeMAP, CeRER and DipMap, where required.
We are committed to providing advice through the channels that best suit your needs. Our brokers can provide advice via phone, email, video and web chat from anywhere in the UK, but we also aim to offer face-to-face appointments for those who request them.
