The number of cashback deals has dropped from 974 in June 2015 to 694 today. The average cashback amount has also fallen over the same period from £479 to £343.
The number of deals available at 90% & 95% LTV has remained steady, increasing by one over the past twelve months. However borrowers with tight budgets have been hit by a decline in value. The average cash rebate that is offered to borrowers with a 10% or 15% deposit has fallen by £208 over the course of the year, almost putting the figure back to 2013 levels.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “The research findings are disappointing, particularly given the high level of competition that currently exists in the mortgage market. In the past, incentive packages with a cashback offer enabled borrowers with limited budgets to ease the upfront costs of securing a mortgage, but anyone looking for this ‘freebie’ today would struggle, as not only is the number of deals in decline but the average size of the rebate has also fallen.
The mortgage rate-cutting frenzy of last year has faded away, so it would be fair to assume that providers are turning to other tactics to attract the attention of borrowers. However, this does not appear to be the case. This could be because borrowers have grown wise to provider marketing tactics or it may be because lenders are paring back their mortgages to the bare minimum in order to compensate for their record low rates."
