UK: Lenders attracting first-time-buyers by offering cashback mortgages

Mortgage lenders are attracting first-time-buyers (FTBs) by increasingly offering cashback mortgages, with Halifax offering £1,000 cashback to FTBs to help pay for high moving costs and legal fees. Halifax is currently the biggest high street bank to offer this type of incentive.

The importance of cashback to FTBs when choosing their lender is on the rise according to RFi Group data, with Q1 2018 findings showing that 41% of FTBs find cashback a very important factor in their choice of lender, a 16% rise from Q2 2017. These figures highlight the fact that with the introduction of cashback incentives, lenders could see potential increases in its FTB customer base.

Cashback incentives are often used to pay for solicitor’s costs or for removal firms, with legal fees approximately costing between £800-£1,500 and moving charges potentially costing an additional £600 according to figures on the Government site; Money Advice Service. The cashback is paid to the borrower once the purchase of the property is completed.

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