The competitive nature of the UK mortgage market has been well documented in recent weeks and months. So it is no surprise to find an increase in mortgage freebies in the marketplace as well.
Moneyfacts.co.uk has undertaken some research into this area. They have discovered 75% of mortgages on the market have some kind of incentive attached to them. The results indicate how important it is for would-be home buyers to consider their options carefully before applying for a particular mortgage.
What kinds of freebies are available?
Cashback is a very popular option, but there are other examples around as well. For example, some banks and building societies offer a reduction on legal fees, whereas others reduce valuation fees. The idea is often to reduce the initial cost of buying a home, since the one-off fees can add up and make the purchase very expensive to begin with. By reducing or getting rid of some of these fees by way of a mortgage freebie, a particular mortgage can appear far more attractive to a new buyer.
An ideal marketplace for those looking for a mortgage
It is clear the mortgage market is a competitive place at the moment, and this can only be a good thing for those looking to buy. Interest rates are very low indeed, and the existence of mortgage freebies in addition to this make it even more important that people shop around to get the deals they want. By choosing an appropriate deal that offers additional perks along with a headline-low rate, a new buyer can secure an affordable mortgage package.
Significant increase in mortgage freebies when compared to five years ago
When you look at the figures, you’ll see how much more popular these deals are when compared to the numbers that were available just five years ago. Back then, there were 1,578 deals available that included an incentive of some kind. By two years ago, that had risen to 2,242. Fast-forward to today, and you have an impressive 2,818 deals on the market. This is almost twice the amount you could have chosen from previously.
Cashback deals have also become more popular during the same period of time. For example, five years ago there were 345 mortgage products on the market that entailed cashback of some description. Now, that has risen sharply to 890 – well over double the amount we saw back then.
Consequently, it is important for mortgage hunters to evaluate all the deals on the market before choosing one in particular to apply for. It is vital to consider whether a cashback deal or a similar perk would make it more affordable to buy a property initially, or whether a long-term perk might be better value. No two buyers will be in the exact same situation. This means shopping around is very important. The good news is, shopping around has never been easier or potentially more profitable than it is at the moment. 2016 is shaping up to be a promising year for anyone who wants to buy their first property, or upgrade from their present one.