Cash Back Mortgages

Cash Back Mortgages

A Cash Back Mortgage is where the Lender will offer a lump sum at the beginning of the mortgage or at an agreed time during the mortgage.

They are usually offered alongside a standard variable rate mortgage, a fixed rate mortgage, or discount rate mortgage.

The standard variable rate package offers a larger lump sum but you usually have to wait for the amount due for about 3 weeks after the mortgage has been completed so you would not be able to use this for a deposit.

The fixed rate and discount rate packages offer a smaller lump sum.

The cash back you receive helps towards legal costs and fees you need for buying the property but usually an early repayment fee applies for a set time and this is about the amount of the lump sum.

It is worth noting that interest rates are usually much higher than other types of mortgage packages and especially on a large cash back offer. Also early redemption penalties are expensive.