Cashback mortgages

Compare cashback mortgages with Mojo Mortgages[1]

What is a cashback mortgage?

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.

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How does a cashback mortgage work?

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.

Should I get a cashback mortgage?

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.

Conditions for cashback mortgages

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.

  • Advantages of a cashback mortgage

    The benefits of taking out a cashback mortgage are:

    • You’ll receive a lump sum which you can spend on what you want
    • The money can help with cash flow, moving costs and things like furnishing your new home
    • Some cashback mortgages come with extra benefits like a refund on product fees, stamp duty or valuation fees, for example
  • Disadvantages of a cashback mortgage

    You may want to think about:

    • They often come with higher interest rates than other mortgages, meaning your monthly payments and cost of the mortgage overall will be more expensive
    • Look out for higher mortgage fees on a cashback mortgage
    • Early repayment penalties might be higher, which could wipe out any cashback you receive

How much can I borrow for a mortgage?

Your mortgage lender will look at your affordability and decide how much you can borrow. It’ll base this decision on:

  • Your salary. Or a combination of your salaries if you’re applying for a joint mortgage
  • Any additional income you have, like bonuses or tax credits
  • The size of your deposit. You’ll usually need at least 5%-10% of the total loan value
  • Any financial outgoings you have – bills, credit cards or insurance payments
  • Your credit history. A good credit history of meeting repayments will give you access to better deals

To get an estimate of your how much you could borrow and your repayments, try our mortgage calculator.

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[1]For online mortgage comparison and advice introduces customers to Mojo Mortgages which is authorised and regulated by the Financial Conduct Authority. Mojo Mortgages is a trading name of Life’s Great Limited.’s relationship with Life’s Great Limited 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.