Cashback Mortgage

This type of mortgage is offered as an incentive for borrowers to borrow from a particular lender. Upon completion the borrower receives a fixed percentage of the purchase price in the form of a 'cashback' payment. The amount of cashback varies between lenders.

The borrower should be aware that the cashback often has to be payed back to the lender if the mortgage is redeemed early. Fees are often on top of any 'standard' fees as part of the underlying mortgage repayment type. Cashback schemes may involve a liability to Capital Gains Tax if it takes the borrower over the annual exemption.