Some lenders provide a cash discount to first-time buyers on completion of the loan. It’s similar to a discount mortgage only instead of giving a saving on the monthly payment for the first year or two they give the whole saving in the form of a lump sum on completion of the mortgage.
The cash back loan facility is designed as an incentive to borrow with a particular mortgage lender. The cash back money is typically used to help with the expenses associated with a home move - such as the cost of furniture, or removal costs.
The amount of the cash back on the mortgage will be determined by factors such as the amount borrowed and the amount of deposit provided. The more equity, the bigger the cash back in most cases.
The cash back does however come with a twist. Naturally, the mortgage lender will not want to lose out on their initial generosity. You can therefore expect to have redemption penalties to switch the loan, and the cash back will need to be repaid during the early years if the mortgage is redeemed.
Sometimes, the mortgage rate will be higher than standard mortgages, but this facility could be attractive to first time buyers.
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