Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, comments: “Since mortgage rates started to tumble the market has seen a marked increase in cashback incentives.

“Research from Moneyfacts.co.uk reveals that today there are 948 cashback mortgage deals compared with 469 four years ago, while the average amount that can be received has shot up from £274 to £475.

“With rates hitting the lowest on record and with nowhere else to go but up, mortgage providers are looking for other ways to attract borrowers - and cashback is just another weapon in their arsenal.

“This cashback war is highly targeted towards first-time buyers who have little cash to spare after paying their initial deposit, and it is an easy way for lenders to increase their lending to this more risky group.

“As buying a home is often the most expensive purchase many will make, it is little wonder that borrowers are being enticed by offerings of cold hard cash of up to £1,500.

“However, borrowers need to bear in mind that any cashback may not be paid upfront, with many offers typically being paid after the mortgage deal is completed.

“The idea of free money may sound appealing but borrowers must consider these deals with caution as they are often accompanied by a slightly higher rate or fee. Mortgage applicants would be wise look at the product in its entirety to ensure that the best deal is obtained.”

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.

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