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Leanne Macardle

Freelance Contributor
Published: 21/05/2019
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While the interest rate on any mortgage might be the first thing to come to mind when searching for a deal, borrowers should also make time to consider those with an incentive package. Thankfully, the number of deals that offer cashback, a free valuation or free legal fees have risen year-on-year, as mortgage lenders look to entice borrowers with additional perks rather than rates alone.

Incentive boost

The latest analysis by shows that there are thousands of deals within the residential mortgage market that offer one or more of the above-mentioned incentives, with the number of deals offering cashback alone increasing by 598 products between May 2017 and today. Not only this, but more lenders are offering at least £1,000 cashback compared to this time last year, and hundreds more now offer a free valuation and/or free legal fees too.


Mortgage deals

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Number of deals with free/refunded valuation




Number of deals with free/refunded legal fees




Number of deals with cashback






“It is encouraging to see that lenders are not just looking to entice borrowers by offering competitive rates, but that they are also looking at the full mortgage package, leading to a rise in the number of products offering incentives,” said Rachel Springall, finance expert at “Incentives are an important part of any deal to consider as it could mean cash-strapped borrowers save significantly on upfront costs.

“As it stands, there are over 200 more cashback incentives available compared to a year ago, and within that, there are more lenders offering large sums of £1,000 or more, including Barclays Mortgage, Cumberland Building Society, Nottingham Building Society, Principality Building Society, Post Office Money®, Tesco Bank and Virgin Money. Over the same period, the number of deals that offer a free valuation has risen by more than 400, while there are now also over 100 more products that offer free legal fees.”

Choose your incentive wisely

Of course, the incentive that will be most appealing will be different for each borrower. For example, those looking to appoint their own solicitor may prefer to choose a product that offers cashback instead of a package that includes the incentive of free legal fees or a free valuation; one reason they may want to go down this route is to avoid a basic valuation of a property, as they may feel their new home could be overvalued and therefore would prefer to instruct their own surveyor for a more comprehensive estimate.

Meanwhile, a key demographic that may pay particular attention to a deal’s incentives is first-time buyers, as they could well have used all their savings for a mortgage deposit or removal costs. “Therefore, a product that incorporates a generous package of incentives could be the better choice,” said Rachel. “Of all the cashback mortgage deals (1,518) on the market, 60% (904) are available to first-time buyers who have a deposit of 20% or less – with some offering as much as £1,500."

However, it’s worth keeping in mind that the products with the most generous incentive packages may not necessarily have the lowest interest rates, so although these deals could offer upfront savings, in the long term, the higher monthly repayments could far exceed any initial savings. This is why it’s so important to calculate the true cost of any mortgage deal to ensure you’re making the best decision, and as Rachel points out, “prospective borrowers in any doubt over which deal to choose would be wise to seek independent financial advice to ensure they find the right option to suit their needs, not just on the upfront cost, but for the full length of their mortgage”.

What next?

Find the best mortgage deal for your needs


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