Rise in mortgage lenders offering freebies to tempt borrowers

3rd November 2015


Mortgage lenders are increasingly offering freebies or cashback deals in order to attract new customers as rock bottom rates have left little room for manoeuvre, new figures show.

One of the most popular methods appears to be adding an incentive package to a mortgage deal. Data from Moneyfacts.co.uk shows that the number of mortgage products offering a range of freebies has increased by over third in five years, illustrated by the table below.


Five Years Ago

Two Years Ago

A Year Ago


Number of mortgage products with incentive package





Total number of products





Moneyfacts.co.uk     Compiled: 3.11.15

Charlotte Nelson, finance expert at Moneyfacts.co.uk, says: “The incentive package has become one of the most popular weapons in a provider’s arsenal when it comes to attracting borrowers, with the number of deals offering some form of incentive increasing by 616 in just two years.

“Now that rates have reached record lows, providers are looking for new ways to compete and attract borrowers. The incentive package fulfils this goal by offering new customers an enticing range of delights, such as free legal fees, gift cards and even cash rebates. 

“Incentive packages, in particular cash rebates, are especially appealing to first-time buyers as they potentially lessen the burden on their savings, giving them more cash for the all-important deposit. However, any savvy borrower can work the incentive package to their advantage and minimise upfront costs by choosing the best deal they can.

“Several providers now offer multiple options within one range of products, which means borrowers can tailor their mortgage choice to their benefit. However, more choice can mean it’s more difficult to compare options and gauge the potential benefits of an incentive package, particularly if it includes free valuation and free legal fees, which vary greatly according to the property price and may not negate the cost of a higher rate or fee. 

“Freebies are always appealing but borrowers shouldn’t choose a mortgage based on its incentive package alone. Instead, mortgage applicants would be wise to look at the product in its entirety to ensure that the best deal is obtained.”

 Check out Mindful Money’s mortgage calculators to see how you can find the best deal. 

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