Cashback volumes at high LTVs falling: Moneyfacts

The average first-time buyer cashback amount for LTVs of 90 and 95 per cent has fallen £59 in two years, according to Moneyfacts research.

Moneyfacts found that the level of cashback had fallen despite the number of cashback deals at these LTVs soaring over the period.

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Moneyfacts finance expert Charlotte Nelson says: “At a time when providers are fighting for borrowers’ attention, the slump in cashback for those seeking higher LTVs is disappointing.

“Not only has the amount offered to borrowers been affected, but the number of cashback deals overall has also seen a decline, from 1,022 deals two years ago to 918 today, although the number at 90 per cent and 95 per cent LTV has in fact increased over that time.

 “With average mortgage rates still falling to new lows each month, the decline of cashback on offer could be a sign that providers are stripping back their offerings to compensate for the low deals.

“Borrowers are also growing wise to the fact that these offers can be wolves in sheep’s clothing; they tempt the customer in but then provide a higher overall rate, making their monthly repayments far more expensive than if they had opted for a standard deal.”