Cash rebates with mortgages - seen by housing market analysts as a great sweetener for many cash-strapped first-time buyers - may now be on the wane according to independent personal finance consultancy Moneyfacts.
It says that two years ago there were only 145 cash-back mortgage products which required a five or 10 per cent deposit - and, on average, they ‘gave back’ £467 to the typical first time buyer customer.
A year ago that range of products had expanded considerably to 254 but with the cash-back falling to an average of £416. Now the number of products is dropping again, down slightly to 242, but with the amount of cash-back also reducing - it’s now on average just £408.
“With average mortgage rates still falling to new lows each month, the decline of cash-back on offer could be a sign that providers are stripping back their offerings to compensate for the low deals” explains Charlotte Nelson of Moneyfacts.
“While cash-back 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” she says.
“Borrowers willing to hunt down deals will still be able to find cash-back of up to £1,000 on offer. And those willing to switch current accounts can receive an extra cash-back 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.”