Cashback Remortgages Explained

A cashback remortgage is a deal where your new lender pays you a cash lump sum, typically between £200 and £500, upon completion of your remortgage. It is an incentive designed to attract borrowers to switch, and the money is yours to spend on whatever you choose: legal fees, home improvements, or simply topping up your savings.

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This guide covers how cashback remortgages work, what UK lenders currently offer, the true cost comparison, and whether the deal is actually worth it for your circumstances.

How does a cashback remortgage work?

The remortgaging process is the same whether or not cashback is included. You switch from your existing lender to a new one, who pays off your old mortgage and gives you a fresh deal. The cashback is an extra on top.

Here is how the cashback element works in practice:

1. You apply for a remortgage with a lender offering a cashback incentive and are accepted.

2. Completion takes place - your new lender redeems your old mortgage and the new one begins.

3. The lender pays the cashback (usually directly into your bank account or via your solicitor) within 30 days of completion.

4. You spend it as you wish, covering solicitor fees, valuation costs, home improvements, or any other purpose. Some lenders specify it must cover legal fees, so check the terms.

Most UK lenders offer a flat-rate cashback rather than a percentage of the loan. Amounts typically range from £200 to £500, though the exact figure varies by lender and product. Some lenders also give you a choice: take the cashback, or receive free standard legal fees instead. Both have value, the right one depends on your solicitor's bill.

See also: The remortgage conveyancing process explained & Can I remortgage my house?

What do UK lenders currently offer?

Many mainstream high-street banks and building societies include cashback options in their remortgage ranges. The table below shows representative offers, so always check directly with lenders, as deals change regularly.

Lender	Cashback offer	Alternative incentive
Nationwide Building Society	£500 cashback	Free standard legal fees
Santander	£250 cashback (paid on completion)	Standard legal fees covered
Barclays	£300 cashback	Free valuation
West Brom Building Society	£500 cashback (selected fixed-rate deals)	Varies by product

These figures are examples from recent product ranges and will change as lenders adjust their offerings.

Is a cashback remortgage worth it? The true cost explained

Free cash sounds appealing, but cashback remortgages require careful calculation. The incentive is usually funded by a slightly higher interest rate or a less competitive arrangement fee, meaning the benefit can be smaller, or even negative, over the full incentive period.

The three main cost trade-offs to weigh up are:

Factor	What to check
Interest rate premium	A cashback deal often sits 0.1-0.3% above the lowest comparable rate. On a £200,000 mortgage over a 2-year fix, that difference could cost £400-£1,200 in additional interest, which may exceed the cashback itself.
Arrangement fee	Ensure the upfront cash incentive is not cancelled out by a costly completion or arrangement fee. Some cashback products carry fees of £999 or more.
Legal fee gap	If you take the cashback rather than free legal fees, make sure the cash sum covers your solicitor's actual bill. Standard remortgage conveyancing typically costs £500-£1,500 depending on the firm.

The right approach: compare the total cost over the full incentive period (usually two to five years), not just the headline cashback figure. Financial comparison sites recommend calculating all fees, the interest rate differential, and the cashback together before deciding.

Read more: Should you pay off your mortgage early? & Early remortgage options

Cashback remortgage vs a low-rate deal - how to work out which wins

Here is a simple framework to compare the two options:

Step 1 - Find your cashback deal details Note the interest rate, any arrangement fee, and the cashback amount.

Step 2 - Find the best equivalent low-rate deal Find the lowest rate available for the same LTV, term, and fix length, and note its arrangement fee (if any).

Step 3 - Calculate total cost over the fix period

	Cashback deal	Low-rate deal
Monthly payment (example)	£1,050	£1,020
Payments over 2 years	£25,200	£24,480
Arrangement fee	£0	£999
Cashback received	-£500	£0
Total cost	£24,700	£25,479

In this example, the cashback deal actually wins despite the higher rate because there is no arrangement fee and the cashback partially offsets the cost. But change the numbers (a larger rate gap, or a higher cashback but even higher fee) and the result flips.

Can I get a cashback remortgage?

Eligibility works the same way as for any remortgage. Lenders will assess:

• Your income and affordability - they want confidence you can meet the new repayments

• Your credit history - most mainstream cashback deals require a clean credit record; specialist lenders may still help if you have past issues (remortgaging with bad credit)

• Your loan-to-value (LTV) - the best cashback deals typically require at least 25% equity (75% LTV or below)

• Your existing banking relationship - some lenders require you to hold a current account with them

If you are approaching the end of a fixed-rate deal, now is the right time to start looking. You can usually lock in a new deal up to six months before your current one ends. Switching early avoids landing on a lender's standard variable rate (SVR), which is typically much higher. See our guide to mortgage renewal for more on timing.

Hidden cashback alternatives worth knowing about

If a lender's cashback deal does not quite work for your numbers, there are two alternatives worth exploring:

Broker commission rebates Independent mortgage brokers are paid a procuration fee by the lender when your mortgage completes. Some brokers will rebate a portion of that commission back to you as a cash payment. It is always worth asking your broker whether they offer this. Not all do, but some specialist online brokers make it a selling point.

Cashback via comparison platforms Some cashback websites offer rewards for completing a mortgage application through a broker listed on their platform. Amounts vary and the cashback comes from the platform rather than the lender, so it sits on top of (not instead of) your mortgage deal.

Neither option replaces the need to find the most competitive rate and fee combination first. Use these as a way to capture a small additional benefit rather than as the primary decision driver.

Pros and cons of cashback remortgages

Pros

• Receive a cash lump sum at completion, useful for covering legal fees or funding home improvements

• Can make switching feel cost-neutral if the cashback covers remortgaging costs

• Some deals offer cashback and free legal fees, maximising the incentive package

• Works well as a short-term financial buffer immediately after switching

Cons

• Interest rates are usually slightly higher than equivalent non-cashback deals

• Arrangement fees may erode the cashback benefit

• Stricter limits on overpayments in some products, with early repayment charges if you leave early

• The cashback is a one-off; the higher rate applies for the full incentive period

Ready to find the best cashback remortgage deal?

The Mortgage Genie is a whole-of-market mortgage broker, which means we search across every available lender, not just a limited panel, to find the deal that works best for your situation. We handle the comparison, the application, and the paperwork, so you do not have to.

Be sure to contact our team on 01915809890. We are ready to help you find the right remortgage deal, cashback or otherwise. And why not see how much you save up to today by using our remortgage calculator?

The above blog has information contained within which was correct at the time of publication but is subject to change.

FAQs

Can you get cashback when you remortgage?

Yes. Many UK lenders include cashback as part of their remortgage product ranges. The cashback is paid by the new lender upon completion, usually directly into your bank account within 30 days. Not every lender offers it, and availability depends on your circumstances and LTV.

Is a cashback mortgage a good idea?

It depends on your numbers. A cashback deal can represent genuinely good value if the cashback offsets your remortgaging costs and the interest rate is still competitive. However, if the rate is significantly higher than the best available deal, the extra interest paid over a two or five-year fix can easily outweigh the lump sum. The only reliable way to answer this for your situation is to compare the total cost (rate, fee, and cashback together) across the full fix term.

What lenders are offering cash back?

Several major UK lenders include cashback in their remortgage ranges, including Nationwide (up to £500), Santander (£250), Barclays (£300 alongside free valuation), and West Brom Building Society (£500 on selected fixed-rate deals). Availability changes regularly as lenders adjust their product ranges.

What is the difference between a cashback remortgage and a cashback mortgage?

A cashback mortgage can apply to both new purchases and remortgages. A cashback remortgage specifically refers to the incentive being offered when you switch an existing mortgage to a new lender. The mechanics are the same in that you receive a lump sum at completion, but the eligibility criteria and available products differ slightly between purchase and remortgage applications.

How much cashback can I get when remortgaging?

Most UK lenders offer a flat-rate cashback of between £200 and £500 on remortgage products. Some lenders calculate it as a small percentage of the loan, but flat-rate deals are more common in the current market. Occasionally, premium deals carry higher cashback for borrowers with significant equity and clean credit histories.

Will I pay tax on cashback from a remortgage?

In most cases, cashback received as part of a mortgage incentive is not treated as taxable income by HMRC. However, tax treatment can depend on individual circumstances, and this is a question worth raising with an accountant or tax adviser if you are a higher-rate taxpayer or using the property for buy-to-let purposes. See our buy-to-let remortgages guide for more on the landlord-specific picture.