Cashback Mortgages
A cash incentive
Free Money, not likely!
With the cashback mortgage the lender gives you a cash sum to the value of an agreed percentage upon completion, for example 5% of the amount you have borrowed. It is usual to pay a much higher interest rate for a cashback mortgage, plus there may be early repayment charges attached to the mortgage even overhanging the period of the rate, meaning that you may have to pay the lenders variable rate for a period with the penalty for leaving being the full repayment of the cashback element. It's hard to see the appeal of this type of mortgage, because cashbacks tend to only really suit those who specifically require a cash sum and who dont mind potentially being tied to their mortgage lender for a period of time. In many circumstances a 100% mortgage could work out more cost effective. Cashback Mortgages have not been popular since the growth of the no deposit Mortgage, but with the very recent demise of the 100% Mortgage and the trouble first time buyers are having getting onto the property ladder, it could make a return. Watch this space...
Disclaimer
James Raynor is Authorised and Reulated by the FSA (463141). You may be charged a fee for the processing of your application and this fee and we estimate that this fee will be £195. Your Home is at risk if you do not keep up the repayments of a Mortgage or any other loan secured against it.
