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Cashback mortgages double in numberThe number of cashback mortgages has doubled in the last four years as lenders battle to grab borrowers' attention.

With mortgage rates falling to fresh lows lenders are looking for other ways to differentiate their mortgage offerings.

New figures from Moneyfacts.co.uk show that there are 948 cashback deals today, compared to 469 four years ago.

And the amount of money on offer has risen sharply as well, from an average £274 to £475.

Charlotte Nelson, finance expert at Moneyfacts.co.uk said: "Since mortgage rates started to tumble the market has seen a marked increase in cashback incentives.

"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. Cashback is just another weapon in their arsenal."

Nelson said the cashback war is mainly targeted at first-time buyers who have little cash to spare after paying their initial deposit.

She said 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."


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