Cashback Mortgages
Instead of receiving a discount, you receive
a single lump sum or cashback generally based on the value of your loan at the
time you take out your mortgage. For example, on a £100,000 mortgage with a 3%
cashback, you will receive £3,000. Your monthly payments are usually linked to
a Variable rate, which may go up and down in line with interest rate changes.
Pros
It means money in your pocket at a time you may
need it most. It can provide you with a very useful contribution to the cost
of moving, or helping you pay for the decorating and refurbishment work you
may have planned for your new home.
Cons
Because of the lump sum you receive at the
start of your mortgage, your rate may not be as attractive as some other
mortgage types. The cashback you receive is not usually available to use as a
deposit on your mortgage, as it is only generally available after you
complete.
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