Buy-to-let
New research has found that the number of cashback incentives given to mortgage borrowers is on the decline.
According to Moneyfacts.co.uk shows, the number of available deals dropped by a staggering 280 in the last year.
| Jun-11 | Jun-13 | Jun-14 | Jun-15 | Today | |
| Number of cashback deals overall | 460 | 768 | 881 | 974 | 694 |
| Average cashback amount overall | £285 | £302 | £406 | £479 | £343 |
| Jun-11 | Jun-13 | Jun-14 | Jun-15 | Today | |
| Number of cashback deals available at 90% & 95% LTV | 42 | 102 | 150 | 187 | 188 |
| Average cashback amount available at 90% & 95% LTV | £280 | £352 | £401 | £570 | £362 |
| Source: Moneyfacts.co.uk | Compiled: 24.6.16 | ||||
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “In the past, incentive packages with a cashback offer enabled borrowers with limited budgets to ease the upfront costs of securing a mortgage, but anyone looking for this ‘freebie’ today would struggle, as not only is the number of deals in decline but the average size of the rebate has also fallen.”
Nelson said that the fall in the number of deals may be because of borrowers were more aware of marketing tactics or lenders paring back their mortgages to the bare minimum to compensate for record low rates.
She said: “Cashback is often targeted towards the higher loan-to-values (LTV), which means that borrowers with tight budgets have been the hardest hit by their decline in value. For instance, the average cash rebate that is offered to borrowers with a 10% or 15% deposit (90% and 95% LTV) has fallen by £208 over the course of one year, almost putting the figure back to 2013 levels.
“Nevertheless, savvy borrowers can still hunt down deals that offer cashback of up to £1,500. However, borrowers need to assess the whole mortgage deal to ensure that it’s suitable for them, and if they do get a deal offering a cash rebate, they will need to find out whether the money will be paid before or after the deal is completed.”
