You are here: Home - News -

Value of cashback deals to first-time buyers drops

by:
  • 30/01/2017
  • 0
Value of cashback deals to first-time buyers drops
Lenders have cut back on the amount of cashback they are providing as an incentive to first-time buyers with smaller deposits, research from Moneyfacts shows.

According to the data, while the amount of cash rebates for customers taking out loans at 90% and 95% loan-to-value (LTV) has grown to 242 from two years ago, this is still down on a year ago, when there were 254 deals. Equally, the value of these deals has fallen from £467 to £408 in a two-year period.

Charlotte Nelson, finance expert at Moneyfacts.co.uk, said it was “disappointing” to see the decline in cashback deals at a time when “providers are fighting for borrowers’ attention”.

“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,” she added.

“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.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Will Hale
Key Partnerships sees surge in equity release referrals

Equity release advice provider Key Partnerships recorded growth of more than 71% in referral business during 2016, as the value...

Close