A cashback mortgage is a home loan that pays you a one-off lump sum when the mortgage completes — typically between £250 and £1,000, or a small percentage of the loan amount. The cashback helps cover moving costs, but the trade-off is usually a slightly higher interest rate.
How Does a Cashback Mortgage Work?
When your mortgage completes, the lender pays you a lump sum. This is separate from the mortgage itself — it's effectively a bonus for choosing that product.
Example: You take a £200,000 mortgage with 0.25% cashback. You receive £500 at completion — useful for covering solicitor fees, removal costs, or new furniture.
Cashback vs Non-Cashback: Which Is Cheaper?
| Deal | Rate | Monthly | Cashback | 2yr Total Cost |
|---|---|---|---|---|
| Non-cashback | 4.29% | £1,098 | £0 | £26,352 |
| Cashback | 4.49% | £1,118 | £500 | £26,332 |
In this example, the cashback deal is marginally cheaper overall — but not always. Always check the full-term comparison.
Get Fee-Free Advice
We'll compare cashback and non-cashback deals from 90+ lenders. Get free mortgage advice →
Frequently Asked Questions
- What is a cashback mortgage?
- A mortgage that pays you a lump sum when it completes — typically used to help cover moving costs or fees.
- How much cashback can I get?
- Usually £250–£1,000 as a fixed amount, or 0.1–0.5% of the mortgage value on percentage-based deals.
- Is a cashback mortgage worth it?
- Sometimes — but only if the total cost over the term (including the slightly higher rate) is still competitive. A broker can compare both options for you.
Sources & References
- Cashback mortgages explained — MoneyHelper
- First-time buyer schemes — GOV.UK
Need Expert Advice?
Speak to one of our mortgage advisors for free, personalised guidance.
Get Your Free Quote