Number of cashback mortgage deals soars
MORTGAGE borrowers have a growing choice of deals which come with some form of cashback, analysis has found.
There are now 1,315 mortgages available which offer cashback, compared with 939 in May 2017, according to Moneyfacts.co.uk.
The average cashback sum available is £449, compared with £366 a year ago.
Rachel Springall, a finance expert at Moneyfacts, said that over the past couple of weeks, Barclays, Coventry Building Society, Leek United Building Society, Loughborough Building Society, Sainsbury’s Bank, West Bromwich Building Society and Yorkshire Building Society have all launched or improved deals that include a cashback incentive.
The development comes at a time when some mortgage rates have been creeping up amid speculation over further possible increases in the Bank of England base rate.
Ms Springall said: “At a time when the mortgage market has undergone a period of uncertainty and with rates having subsequently risen, lenders have been eyeing up their incentive packages, not just their interest rates.
“On average, borrowers can get £83 more in cashback today than they could a year ago, and competition for this perk has intensified on certain deals in recent weeks.”
She said the surge in mortgages offering cashback will be “great news for borrowers looking to cover the cost of moving or to pay for the fees of instructing their own solicitor to handle the legalities”.
But she continued: “Still, out of the entire mortgage market, only 28% of the deals offer a cashback incentive, so there is much more room for improvement.”
Ms Springall said many of the cashback offers are aimed at borrowers with smaller deposits or equity.
She said: “Out of all the cashback mortgage deals on the market, 64% are available to borrowers who have a deposit of between 5% and 20%, with as much as £1,500 available.
“Indeed, first-time buyers may have very little cash to spare upfront, so they could be looking for an extra incentive to help them save some money.”
Ms Springall added that while cashback is a “handy perk”, borrowers were advised to weigh up the overall mortgage deal rather than just focusing on a particular rate or incentive.