Cashback mortgages and remortgages
Whichever type of mortgage is selected, the lender will charge interest and there will be an overall cost to the borrower. The cost of borrowing will vary depending upon the requirements of the lender; for example, there may be a setting up fee, administrative fee, reservation fee and usually there will be valuation and legal fees to be met.
Cashback mortgages result in the lender paying a cash lump sum to the borrower on completion of the mortgage. The payment is tax free but the whole or a proportion of the cashback is normally repayable if the mortgage is redeemed early or repaid in part or whole during a set period. The amount of the cashback payment is often a percentage of the amount borrowed. Lenders do not specify how the cashback must be spent.
This may all seem very complex but don't worry use a mortgage broker with experience can be invaluable in helping you to navigate through the different lenders and deals. A good mortgage advisor knows all the processes involved and can help you through each step.