New research shows that mortgage deals with an incentive package now account for three-quarters of the mortgage market.
Moneyfacts.co.uk said that there had been a sharp rise in mortgage freebies with 75% of the market now offering an incentive, up 13% in the last year.
Competition in the mortgage market has increased in recent years, with providers slashing rates to entice customers. However, more and more providers are looking to compete not only on price but also on incentive packages accompanying their mortgages.
There are now 2,818 mortgage deals on the market which offer incentives such as cashback, free legal fees and free valuation.
In the past five years the number of cashback deals has risen from 345 to 890.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The current level of competition in the mortgage market means that borrowers are not just being offered headline-grabbing rates but also some of the most cost-effective mortgages they’ve perhaps ever seen.
“This is because providers are finding it increasingly difficult to stand out from the crowd to attract new customers thanks to the rate-cutting frenzy that has gripped the mortgage sector. The incentive package is therefore is great way to distinguish themselves from other lenders.
“Buying or a remortgaging a home can be expensive, particularly for borrowers who have used the majority of their savings to put down a deposit, so incentives such as free legal fees, free valuation or even cashback can be really attractive. With so many more deals on the market to choose from, savvy borrowers will definitely be able to turn the situation to their advantage and minimise some of their upfront costs.”
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