Don’t be tempted by cashback mortgage deals

Many lenders are now offering “cashback mortgages” that can return up to £1,000 to you on completion. But beware, says Ruth Jackson-Kirby. Cashback offers can often hide an expensive mortgage.

Handful of cash
You may be worse off with a cashback mortgage
(Image credit: © Getty Images/iStockphoto)

If you’ve been shopping around for a mortgage this month, you might have noticed that lenders are offering “cashback” deals of up to £1,000.

The idea of being handed £1,000 when you take out a mortgage is certainly tempting – but think twice before you grab the cash. Cashback offers are often disguising an expensive mortgage.

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Row 0 - Cell 0 Mortgage RateFeeMax LTV% Change in rates from last month
Two-year fixed rate mortgage Progressive Building Society2.34%£095%+11.4%
Five-year fixed rate mortgageReliance Bank2.45%£99575%+11.4%
Ten-year fixed rate mortgageBarclays2.82%£99960%+14.7%
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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.