Cashback
Last checked UK · illustrative onlyNot a lender or brokerAboutDisclaimer
Published by Rodway Labs — not a mortgage adviser
Published · Last revised
Cashback: A lump sum a lender pays you for taking a deal. It reduces net fees. It can be clawed back if you leave early.
The offer says when it is paid, usually on or after completion, and whether you must repay some or all of it if you redeem during the deal period. That repayment is called clawback.
Treat it as part of the deal’s price rather than a bonus. What matters is the rate, the fees and the cashback together.
UK lenders often limit cashback to particular routes, for example a remortgage from another lender but not a product transfer, and some pay it into the mortgage account rather than to you. The offer sets out when it is paid and when it can be clawed back.
Example: what £250 cashback does to the fees
- Fees
- £999 product fee + £500 legal = £1,499
- Less cashback
- −£250, so net fees are £1,249
- Monthly saving
- about £27 (5.97% new lender against a 6.22% product transfer)
- Payback
- about 46 months with cashback, about 55 months without
- Over 24 months
- transfer ahead by about £329 with cashback, about £579 without
Illustrative only. £185,000 over 22 years, switch timed after the current deal ends, so no early repayment charge.
How it affects a remortgage
Cashback lowers net fees pound for pound, but it does not always change the answer. In the example, £250 helps, yet the fee-free product transfer still wins over 24 months.
A deal with larger cashback can still lose if it carries a higher fee, a higher rate or a longer early repayment charge. Compare the net figure over the same period, not the headline cashback.
Read the clawback clause before you count the money as yours, especially if you might move or remortgage within the deal period.
Cashback paid after completion does not help with costs due earlier, such as a valuation or legal fee, so check the timing if cash is tight.
Example: cashback against the monthly saving, and clawback
- Cashback
- £250
- As months of the £27.44 saving
- about 9 months
- Net fees with cashback kept
- £1,249
- Net fees if all £250 is clawed back
- £1,499 again
- Rate gap over a 24-month deal
- about £659 (24 × £27.44), against £250 cashback
Illustrative only. Whether clawback is full, partial or tapered is set by the offer; the table shows the full case.
Common mistakes
- Treating cashback as a gift. It is part of the price and belongs in the net fee figure.
- Spending it before completion. It is often paid on or after completion, so it cannot cover a valuation or legal fee due earlier.
- Ignoring clawback. Leaving during the deal can mean repaying it, on top of any ERC.
- Choosing the biggest cashback. A larger sum with a higher rate or fee can still lose over the same period.
- Comparing cashback with a fee-free rate on one month only. On the example, the £250 equals about 9 months of the £27.44 saving between 6.22% and 5.97%; over a 24-month deal the rate gap is worth about £659 (24 × £27.44), more than twice the cashback.
Edge cases
- Paid to the mortgage account. Some lenders pay cashback against the balance, which lowers the loan rather than giving you cash.
- Route limits. Cashback may only apply to remortgages from another lender, not to product transfers.
- Fee-paid packages. MoneyHelper notes some lenders pay certain fees or offer cashback; a free valuation and cashback are worth different amounts, so price both.
- Leaving early. Clawback and an ERC can both apply when a deal is redeemed early, so the cost of leaving can be larger than the ERC alone.
- Cashback against an ERC. On the example, leaving with four months still to run costs the £3,700 ERC; £250 cashback would cover under 7% of it, so the end date of the current deal matters far more than the cashback.
Where to go next
- Cashback vs lower fee — how to weigh the two.
- True-cost calculator — net fees with your own cashback.
- How much does it cost to remortgage? — the fees cashback offsets.
Sources checked 2 November 2026
- MoneyHelper: remortgaging to cut costs — remortgage and product transfer definitions, switching costs, LTV formula, valuations, porting and negative equity.
Figures marked example are illustrative only, not a quote and not lender, broker or FCA-regulated advice. Definitions are plain English for this site, not the wording in your offer. The definitions and explanations are in our own words. Last checked 2 November 2026.