Cash rebates are seen as a great sweetener for cash-strapped first-time buyers, with the providers that offer this type of incentive really standing out from the crowd. However, research by Moneyfacts.co.uk shows that the average cashback for those with a modest deposit (90 and 95% loan-to-value) has fallen by £59 in just two years.

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:

“At a time when providers are fighting for borrowers’ attention, the slump in cashback for those seeking higher loan-to-values (LTVs) is disappointing. Not only has the amount offered to borrowers been affected, but the number of cashback deals overall has also seen a decline, from 1,022 deals two years ago to 918 today, although the number at 90% and 95% LTV has in fact increased over that time.

“With average mortgage rates still falling to new lows each month, the decline of cashback on offer could be a sign that providers are stripping back their offerings to compensate for the low deals. Borrowers are also growing wise to the fact that these offers can be wolves in sheep’s clothing; they tempt the customer in but then provide a higher overall rate, making their monthly repayments far more expensive than if they had opted for a standard deal.

“While cashback offers borrowers with a limited budget, especially first-time buyers, a glimmer of hope that some upfront costs will be eased, the reliance on this can no longer be a sure bet, as not only the number of deals offering this has fallen but so too has the amount on offer.

“Borrowers willing to hunt down deals will still be able to find cashback of up to £1,000 on offer. And those willing to switch current accounts can receive an extra cashback boost on top of this. However, borrowers will need to assess the whole mortgage to ensure it’s the most appropriate deal for them in the long run.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.