Cashback mortgage deals have doubled from 469 four years ago to 948 and the average amount received has shot up from £274 to £475, data from Moneyfacts.co.uk has revealed.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “With rates hitting the lowest on record and with nowhere else to go but up, mortgage providers are looking for other ways to attract borrowers - and cashback is just another weapon in their arsenal.
“This cashback war is highly targeted towards first-time buyers who have little cash to spare after paying their initial deposit, and it is an easy way for lenders to increase their lending to this more risky group.
“As buying a home is often the most expensive purchase many will make, it is little wonder that borrowers are being enticed by offerings of cold hard cash of up to £1,500.”
She added: “However, borrowers need to bear in mind that any cashback may not be paid up front, with many offers typically being paid after the mortgage deal is completed.
“The idea of free money may sound appealing but borrowers must consider these deals with caution as they are often accompanied by a slightly higher rate or fee. Mortgage applicants would be wise look at the product in its entirety to ensure that the best deal is obtained.”
