Cashback mortgages account for almost a third of products
The proportion of deals with a cashback incentive has grown significantly in recent years, according to Moneyfacts.
The financial information provider said that the incentives are becoming more widespread within both the residential and buy-to-let mortgage markets.
In November 2011 there were only 627 cashback mortgages available, accounting for 19% of all products. Now there are 1,459 cashback deals on offer, accounting for 29% of all mortgage deals.
Darren Cook, finance expert at Moneyfacts.co.uk, said: “Buying a new home or remortgaging your existing deal can be an expensive process. An offer that contains cashback may help to soften the immediate costs that this process incurs.
“First-time buyers may be encouraged to find that two-thirds of residential mortgage deals with a cashback incentive option require a deposit of up to 20%. This could make quite a difference upfront to those who have struggled to save a suitable deposit amount.”
There are now 444 buy-to-let deals on offer with a cashback incentive, compared to just 94 in 2011.
Cook said: “An incentive of cashback to assist landlords in covering the costs of a buy-to-let mortgage is becoming a more prominent feature of the buy-to-let market. Especially considering last year’s upheaval in this sector, landlords will be looking for any way to cut costs and increase their margins. It seems that providers are obliging.”