Financial data firm Moneyfacts has revealed the extent of the growth in cashback incentives in both the residential and buy-to-let mortgage products.
The data shows that, today, 29 per cent of all residential products come with a cashback incentive – or 1,459. This compares to 26 per cent – 1,249 products – a year ago, and in November 2011, 19 per cent – or 627 products.
Moneyfacts puts this growth down to fewer mortgage applicants having more choice than ever before, with the increased competition driving down rates.
In the BTL market, 19 per cent of all deals today come with cashback, which translates to 444 products. A year ago this stood at 16 per cent, equal to 291 products. However, in November 2011, 22 per cent came with this incentive, although the actual number of deals, at 93 products, was much lower.
Of the 444 products highlighted in the BTL market, 266 are available at LTV rates of 70 per cent, 75 per cent, and 80 per cent, which, Moneyfacts says, could be appealing to first-time landlords.
Moneyfacts finance expert Darren Cook adds: “An incentive of cashback to assist landlords in covering the costs of a BTL mortgage is becoming a more prominent feature of the BTL market.
“Especially considering last year’s upheaval in this sector, landlords will be looking for any way to cut costs and increase their margins. It seems that providers are obliging.”