Cashback Remortgage Deals
When a lender pays a lump sum at the beginning of the mortgage term as an incentive to the borrower, it is called a cash back mortgage. With so much competition in the lending market, there are a number of remortgage cash back deals available as lenders try and entice new customers. Remortgage cash back deals are usually taken out because, on top of the cost of the home itself, there are many additional costs associated with buying a new house, and the extra money can be used for:
- Buying furniture for the new home
- Covering solicitor fees
- Stamp duty
There are a large number of providers that may offer customers remortgage cashback deals. Therefore if you are looking to get a better deal, it is recommended to compare the market as much as possible for competitive mortgage comparisons.
A cashback mortgage is a specific type of mortgage agreement wherein the lender will agree to supply the policy holder with a tax free lump at the start of the mortgage. This type of agreement is often very popular with first time buyers, as it provides them with a useful source of capital that can be spent on furnishings or other important household goods.
Although widely used by first time buyers, customers who remortgage their property as part of a cashback deal often choose to use this money for other similar purposes, such as for home improvements or renovations.
Many customers may also choose to remortgage their property in this way for a variety of other purposes. A remortgage cashback deal could, for example, be used as a loan to help to consolidate and manage any outstanding debts that customers may have.
It is always advisable to investigate new mortgage offers in order to get a better deal, to make this process easier, feel free to consult our mortgage comparisons table for offers that are currently on the market.
For all the useful benefits that may come as a result of remortgaging a property in this way, it is important to remember that these cashback remortgages are not without their drawbacks. For customers who may still have a substantial amount of their mortgage to still repay, this extra loan should be carefully managed, as they may at risk of falling into further debt.
Furthermore, borrowers should also take care to consider the interest rates of remortgage cashback offers, as they may often find that interest rates for these types of deal may be significantly higher compared to other remortgage offers.