Abbey has launched its Reward Mortgage which gives borrowers regular cashback every two years.
The product has a guaranteed lifetime tracker rate of 1.24% above the Bank of England base rate, with no booking fees or early redemption penalties.
Reward Mortgage customers will get back 1% of their outstanding mortgage balance every two years, which they can use to reduce the balance and pay the mortgage back earlier, or take as cash. Abbey says this is the only mortgage on the market that rewards customers with a regular lump sum in cash.
The mortgage is fully portable and if in the future the client wishes to borrow more money for home improvements, they can take out a Reward Mortgage home improvement loan for the extra funds they need, which will also pay 1% cash back every two years.
Ambrose McGinn, director of Abbey for Intermediaries, says: “The Reward Mortgage will be ideal for IFAs with clients who want a competitive deal for the lifetime of their mortgage, with the added plus of getting something back. This product is a new approach to rewarding loyalty. It's a great choice for people who don't want the cost and bother or remortgaging every couple of years.”
Intermediaries offering the Reward Mortgage to first-time buyers, people moving home and remortgage customers can also offer the option of having Abbey pay for their legal and valuation fees in return for paying a slightly higher mortgage interest rate.
If customers choose this option, the interest rate is increased by 0.10% where the mortgage rate will track the Bank of England base rate plus 1.34%. Customers taking this option will have to repay the cost of the legal and valuation fees if they redeem the mortgage in the first two years.