Choosing a mortgage linked with a cashback gives you a cash lump sum, tax-free, on completion of your mortgage. They come in discounts, trackers or fixed rates so you need to choose which type of mortgage you would prefer and then the cashback is an added bonus.

By giving borrowers a fixed lump sum or a percentage of the loan as a lump sum, lenders offered an attractive incentive to take out one of their mortgages. To start with you must decide on the type of cashback you want - one based as a percentage of the sum you are borrowing, or simply a cash lump sum. If you decide on a percentage cashback, the amount of money you get as a cashback will be determined by how much you are borrowing. This in turn could be dictated by the size of the deposit you are able to put down.

In the past, cashbacks as a percentage of the loan tended to be higher amounts than a fixed sum. For instance at one point cashbacks of 6-7 per cent were reasonably common whilst fixed sum cashbacks tended to be in the region of £200-300.

There are currently very few cashbacks currently available so I would not look for this type of mortgage as priority.

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