The society asked 1,224 homebuyers across the UK about mortgage cashback deals to find out whether borrowers valued this option and to determine how they would spend the cash which becomes available on completion.
Respondents had four top priorities overall when it came to using cashback from their mortgage deal:
- 25 per cent would use cashback to cover the costs of removals or storage;
- 24 per cent would pay legal or other professional fees with their cashback;
- 24 per cent would put the money straight into overpaying their new mortgage; and
- 23 per cent would use their cashback to cover maintenance or improvements they were expecting in their new home, such as a boiler service.
The research indicated that when it came to cashback, there was a difference in behaviour between residential purchasers and buy-to-let landlords.
Borrowers buying a residential property were most likely, at 32 per cent, to settle professional services’ bills with their cashback, whereas 51 per cent of buy-to-let purchasers favoured putting it straight into overpaying their loan.
Matt Bartle (pictured), director of products at Leeds Building Society, said selecting a mortgage was always a personal choice.
Bartle said: “Of course, borrowers can choose how to spend their cashback and it’s positive to see that people would use the funds to cover costs associated with moving and in some cases overpay to reduce the size of a loan immediately.”