Cashback mortgages

At the beginning of your mortgage you receive a lump sum - usually around 5% of your mortgage. The mortgage itself is a standard variable rate.

Pros:

• Useful if you need capital to cover costs: survey fees, moving costs, stamp duty etc
• Your cash sum could compensate for any rises in interest rates during the penalty period

Cons:

• Early Repayment charges could be higher, and apply for a longer period
• Often the cashback is repayable if you change mortgage within a set period