Have you heard about “Cashback Mortgages”?

A cashback mortgage is a type of mortgage where the lender provides a cash incentive at the time of closing, to encourage the borrower to go with that specific lender. This incentive is typically a percentage of the mortgage amount and can be used by the borrower for any purpose, such as covering closing costs, home renovations, or other expenses.

While a cashback mortgage can seem attractive, it’s important to consider the potential drawbacks before making a decision.

  • they often come with higher interest rates and fees than traditional mortgages. This means that you may end up paying more in interest over the life of the mortgage, which can add up to thousands of dollars in additional costs.
  • cashback mortgages often have restrictions on prepayment and early termination. This means that if you decide to pay off your mortgage early or refinance, you may be required to pay back a portion of the cashback incentive or face penalties.

They are definitely worth looking at and can sometimes make sense, but it is definitely worth worth exploring other mortgage options that offer more favorable interest rates and terms.

At the end of the day when I’m evaluating mortgage products I’m looking to find you the best deal, which includes cashback, prepayment penalties, rate, flexibility, and more.

If you, or anyone you know, have any further questions or concerns about cashback mortgages or other mortgage options, please don’t hesitate to reach out to me.