Cashbackmortgages.co.uk offers borrowers with a clean credit history and loans of £200,000 or more, 0.1 per cent cash back when they complete a product transfer.
The cashback is taken from the procuration fee that Chess Mortgages receives from the lender.
Borrowers using the service will receive two quotes; one for a product transfer and the other for a remortgage with a different lender. The broker team will advise the borrower on the best route to take.
If the borrower decides to remortgage, a fee of around £495 is charged and no cashback is payable.
Singh said: “You have the likes of Moneysupermarket entering the product transfer market but not offering advice, and then you have Trussle who do advise but do not offer cashback.
“We will carry out a full fact find, search the whole of the market to see if we can find something better and if we can’t we will carry out the transfer for free and give them cashback from our procuration fee.”
The whole process is carried out online. Singh uses the Smartr365 platform which has an open banking verification system to carry out anti-money laundering checks and a digital identification checking system.
Cashbackmortgages.co.uk was launched on 27 October to coincide with Diwali. Singh’s new venture will primarily focus on borrowers in the South East of England, where mortgages tend to be higher than £200,000 on average.
Singh, who set up Chess Mortgages in 1999, said offering free product transfers with cashback is a “loss leader” for the firm but an effective way of grabbing borrowers’ attention.
He is reviewing a fee-free option for uncomplicated remortgage and buy to let transactions.