Mortgage cashback

Some mortgage lenders, particularly in the United Kingdom , give a one-off lump sum payment to new borrowers at the beginning of a mortgage.

Called cashback, this lump sum is often marketed as free cash, but it is in fact funded by the mortgage interest paid by the borrower.

## Contents

* 1 Amount
* 2 Why do lenders offer mortgage cashbacks[2]?
* 3 References
* 4 External links

## Amount

The size of the lump sum is dependent on the size of the mortgage and is usually offered only on certain mortgages in a mortgage lender's range.

Cashback on mortgages is popular with first time buyers, who put the cashback towards buying furniture,[1] as these types of buyers often do not have any surplus funds after paying the deposit on their new home.

## Why do lenders offer mortgage cashbacks[2]?

Mortgage lenders often provide incentives to allure new customers or retain existing ones. These incentives, which may not always be advertised, vary significantly in value. They serve as part of a broader strategy to dissuade individuals from choosing a competitor. These offers apply whether you're purchasing or constructing a new house, restructuring your current mortgage, financing an investment property, or considering refinancing.

Here are some of the common promotional offers used by mortgage lenders:

* A discounted interest rate for the first six months or year
* A contribution to your legal fees
* Financial help with any early repayment break fees your current lender might charge
* A parcel of points for a reward scheme
* Reduced home and contents insurance premiums for a limited time
* No mortgage application, set up or documentation fees
* A one-off mortgage cashback payment

## References

1. ↑ Joiner, Murray (2021-10-27). "What is a mortgage cashback?" (in en-NZ). https://mortgages.co.nz/what-is-a-mortgage-cashback.
2. ↑ Joiner, Murray (2021-10-27). "What is a mortgage cashback?" (in en-NZ). https://mortgages.co.nz/what-is-a-mortgage-cashback.

## External links

* Mortgage Advice
* Reverse Mortgage

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