Uses for mortgage cashback revealed

Published on

Research for the Leeds Building Society has found that Stamp Duty, home improvements or immediately starting to pay down their new mortgage are all ways homebuyers would spend cashback from lenders.

The mutual carried out national research into mortgage cashback deals to find out whether borrowers valued this option and how they would spend this cash, which becomes available on completion.

Practical-minded respondents had four top priorities overall when it came to using cashback from their mortgage deal:

  • 25% would use cashback to cover the costs of removals or storage;
  • 24% would pay legal or other professional fees with their cashback;
  • 24% would put the money straight into overpaying their new mortgage; and
  • 23% would use their cashback to cover maintenance or improvements they were expecting in their new home, such as a boiler service.

There was a difference in behaviour between residential purchasers and buy-to-let landlords.

Borrowers buying a residential property were most likely (32%) to settle professional services’ bills with their cashback, whereas 51% of buy-to-let purchasers favoured putting the cashback straight into overpaying their loan.

Matt Bartle, the Leeds Building Society’s director of products, said: “Everyone’s requirements will be individual to them, which is why we offer different combinations of fees, features and incentives across our mortgage product range.

“For that reason we offer incentive packages which give borrowers plenty of choice, not only on the rate and term of their mortgage, but also to help with the other costs of moving home or remortgaging.

“Building on our market knowledge and long experience of mortgage lending, we continue to test ideas and ask borrowers what they need, so we can develop the product deals and lending criteria which will help more people to have the home they want.

“Of course, borrowers can choose how to spend their cashback and it’s positive to see that people would use the funds to cover costs associated with moving and in some cases overpay to reduce the size of a loan immediately.”

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Energy-efficient homes ‘may carry higher climate risks’

Some of the UK’s more energy-efficient homes could face greater long-term exposure to flooding...

New towns plan may help supply but risks falling short, says former RICS chair

The government’s announcement of seven proposed new towns has been broadly welcomed as a...

Buy-to-let mortgage rates rise as landlords face fresh cost pressures

Buy-to-let mortgage rates have risen sharply this month, while landlords are also facing further...

Virgin Money to take mortgage application systems offline for five days

Virgin money has announced that its Virgin Money and Clydesdale online application platforms will...

Parental support for adult children is reshaping retirement plans

Three in five parents with children aged over 18 are providing financial support, with...

Latest publication

Other news

Energy-efficient homes ‘may carry higher climate risks’

Some of the UK’s more energy-efficient homes could face greater long-term exposure to flooding...

Mutual strength and the broker partnership

The mutual sector has always been associated with community purpose, local branches and a...

New towns plan may help supply but risks falling short, says former RICS chair

The government’s announcement of seven proposed new towns has been broadly welcomed as a...