Cash back mortgage
Cash back explained
Cashback
A Cashback mortgage works by having the cashback a sum of money paid by the lender to the borrower on completion of
a mortgage.
In offering a cash-back, the lender is effectively discounting the product
against its income-generating
potential over the whole term or a large proportion of it.
It therefore needs a way of encouraging the borrower to maintain the loan over a
substantial period. This
is normally achieved by means of clawback:
• if a borrower redeems a cash-back loan early (normally within the first five
years, though periods
vary), some or all of the cash-back has to be returned by the borrower;
• it is essential that borrowers are made aware of the possibility of claw-back
before they take up a
mortgage with claw-back - they will almost certainly have spent it!
• A Cashback is a sum of money paid by the lender to
the borrower on completion of a mortgage.
• The amount offered may be anything up to around
£10,000. The factors which tend to lead to the larger
cash-backs are:
Larger loans;
Smaller loan-to-value ratio.
• Claw-back
In offering a cashback, the lender is effectively
discounting the product against its income generating
potential over the whole term or a
large proportion of it.
This is normally achieved by means of
clawback.
If a borrower redeems a cashback mortgage early
(normally within the first five years, though
periods vary), some or all of the cash-back has to
be returned by the borrower. For a mortgage enquiry please contact
Details supplied here will be strictly confidential!
| 
