Halifax customers could receive £500 cashback for certain deals until the 18th of March 2018. Anyone from first time buyers to those who are remortgaging from another lender are potentially eligible to benefit. An extra £500 appears extremely tempting; especially when moving home. However, is the cashback deal worth it, or are mortgage borrowers missing out on other, better deals?
To begin with, property buyers in any situation can take this cash back deal but only if they’re borrowing between £100,00 and £250,000. Additionally, the deal is only available directly from the lender, so you aren’t eligible unless you are a Halifax customer. Presently Halifax rates aren’t the best options on the market. However, the company does have competitive rates on fee-free deals, which may be cheaper for the long-term.
The best alternative rate on the market is 1.09% for a two-year fixed rate deal from Santander, with 75% loan-to-value. It also comes with a large fee of £1,499. With this deal, monthly repayments on a £100,000 mortgage over 25 years would be £381. The cost over two years factoring the fee is £10,642.
In comparison, Halifax has a 75% loan-to-value (LTV) two-year fixed rate of 2.14% with no fee. The monthly repayments are £50 more at £431 yet the overall cost is cheaper at £10,337. Over the two years, this is £305 less than the Santander fix. Furthermore, when the £500 cashback is considered, the cost decreases to £9,837.
If borrowers are specifically searching for a £500 cashback deal, Accord Mortgages have an improved rate of 75% LTV two-year fixed rate currently at 1.99%. Making monthly repayments of £423 and the cost over two years at £10,161 or £9,661 with the cashback, this is almost £200 less than the Halifax deal.
There are a variety of other lenders that offer cashback deals. Presently, the best deal is from the Post Office. This has a two-year fixed rate mortgage at 2.68% for those that have a 10% deposit. The deal doesn’t include a fee and the cashback upon completion is £1,000 – double the amount offered by Halifax. Bank of Ireland also has a 90% LTV two-year fixed rate at 2.57% which has £750 cashback.
Borrowers should do their own research before committing to any deal. Although the deal offered by Halifax is competitive, it isn’t the cheapest on the market. Any deal that is taken depends entirely on what borrowers are searching for and how they qualify for a deal. For example, Halifax is useful for self-employed borrowers whilst Santander would be preferred by borrowers in full-time work.