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Compare cashback mortgages with Koodoo[1]
It’s a type of mortgage that rewards you with a sum of cash when you take it out.
There are a few different types of cashback mortgage, some are aimed at first-time buyers and others are targeted at those looking to remortgage.
The cashback you receive will be a lump sum. This could be a set amount, a percentage of what you’re borrowing or even an amount equal to one of your monthly payments, up to a limit.
You’ll receive the cashback when you complete on the mortgage, or after you’ve made your first monthly payment. The money will be paid directly into your bank account or sent to your solicitor.
This money can then be used for whatever you want, it doesn’t have to be spent on a house move, but it can certainly come in handy for it.
The prospect of receiving ‘free money’ when you’re taking out a mortgage can be attractive.
But before making any decisions, be sure to carefully compare a cashback mortgage against the other options available.
While they may seem like a great deal at first glance, they often charge a higher interest rate than other mortgages, so you could end up with higher monthly payments and it may cost you more overall.
As well as considering interest rates, look for costs like legal and valuation fees, as well as the length of the initial deal, to calculate the overall amount you’ll repay on a cashback mortgage.
You can use the annual percentage rate of charge (APRC) to compare the cost of mortgages over their whole term. All providers must show this.
There may also be early repayment and overpayment charges that apply, so check if that’s the case, too.
As well as the usual affordability criteria required for getting a mortgage, there may be other conditions you’ll need to meet to qualify for a cashback mortgage.
For example, you’ll often need to hold a current account with the lender or be a first-time buyer.
The sum you borrow might also need to be over a certain amount.
Some lenders now also offer cashback mortgages for people who purchase a property with a high-energy efficiency rating.
The benefits of taking out a cashback mortgage are:
You may want to think about:
Your mortgage lender will look at your affordability and decide how much you can borrow. It’ll base this decision on:
To get an estimate of your how much you could borrow and your repayments, try our mortgage calculator.
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
PLEASE NOTE: THE FCA DOES NOT REGULATE MOST BUY TO LET MORTGAGES
[1]For online mortgage comparison and advice Gocompare.com introduces customers to Koodoo which is the trading name of Mortgage Power Limited who are authorised and regulated by the Financial Conduct Authority (FRN 845978). Gocompare.com’s relationship with Koodoo is limited to that of a business partnership, no common ownership or control exists between us. Please note, we cannot be held responsible for the content of external websites and by using the links stated to access these separate websites you will be subject to the terms of use applying to those sites.