Last Updated: 04 December 2020

Cashback mortgages give customers a cash lump sum when they buy a property. The cashback is paid out when your mortgage starts and can be worth hundreds or even thousands of pounds.

Cash-back mortgages are popular with first time buyers who need the money, but in the long run are often more expensive than the best first time buyer mortgages on the market.

Is a cash back mortgage worth it?

Getting mortgage cash back after buying a property can be tempting as the extra cash can take the sting out of the lender's charges. However, cash back mortgages do not always offer the best rates.

To work out if a cashback mortgage is worth it:

  1. 1.

    Check how much you will repay each month over the cash back mortgage deal's term

  2. 2.

    Compare the monthly repayments with non-cashback mortgage deals

If the cashback lump sum is worth less than the interest you would save by taking out an alternative mortgage deal, it may not be worth it.

For example, if your mortgage cashback is 500, and you would save 600 over the term of an alternative mortgage, the cashback mortgage is not worth it.

Watch out for charges when applying for mortgages with cashback, as the mortgage fees you will have to pay are usually more than you get back.

How do you qualify for a cashback mortgage?

You need to pass the lender's eligibility criteria to qualify for mortgage cashback, which can include:

  • You are a first time buyer

  • You saved into the lender's cashback based savings account

  • You have your current account with the lender

If you are not sure if a cashback mortgage is right for you, speak to a mortgage broker before committing to any deals.

How to find the best mortgage cashback offers

As mentioned, while getting mortgage cashback on completion from a lender can be extremely tempting when you have a lot of expenses (such as moving costs), you may end up paying more in the long run as the interest rates offered are higher.

Use this cashback mortgage deals comparison table to find the lowest initial rate, but don't forget to factor in the cost of any fees when comparing products.

Alternatively, you can compare all mortgage types using this comparison.

Cashback mortgages FAQs

Q

When do you get the mortgage cashback?

A

Your lender will pay the cashback into the account you used to set up your mortgage direct debit following the completion of the mortgage application.
Be aware that most lenders will wait for the first mortgage payment to go out before paying in the cashback.

Q

Can I get mortgage cashback twice for a joint mortgage?

A

No, lenders only offer mortgage cashback for each mortgage application, rather than each person applying.

Q

Am I guaranteed to get the cashback?

A

No, each lender has its own eligibility criteria that you must meet to qualify for any cashback. Check with your lender before you apply.

Q

Can I use the mortgage cashback for anything?

A

Yes, the cashback you receive after your mortgage has completed can be used for any purpose, including home furnishings or repaying debt.

Q

Can I get cashback when I remortgage?

A

Yes, some lenders do offer cashback on remortgage deals, but the mortgage rate may also be higher.

Q

Can I get cashback on mortgage payments?

A

Cashback mortgage deals only pay a one-off lump sum at the start of your mortgage, not regular cashback in monthly instalments.

About our mortgage comparison

Q

Who do we include in this comparison?

A

We include every mortgage in the UK you can apply for directly from the lender. They are all from lenders regulated by the Financial Conduct Authority. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.