Mortgage Cashback Offers

by | Apr 6, 2020 | Mortgages, Investment Advice, Back to Blog


Want to know some Mortgage Cashback Offers in Donegal & Ireland?

With some lenders now offering cashback on their mortgages, it’s not surprising that customers, especially first-time buyers, are being tempted by these cash lump sums. The most important question to consider before jumping around the kitchen with excitement is; do these offers actually offer the best value over the mortgage term?

Are Mortgage cashback offers good value?

Now, this is a great question to ask yourself.
These cashback offerings whether you’re looking to buy your first home or switch mortgage, it’s essential to shop around and take advice to make sure you’re getting the best deal for your situation.

Note: Most lenders do not offer the cashback deals where you choose to take a Green Rate Mortgage,

So, who’s offering what in terms of cashback?

AIB – €2,000 to switchers

AIB isn’t offering cashback to first-time buyers. It is, however, offering €2,000 back if you switch your mortgage to them.
The cash will be transferred directly into your current account within two months of drawing down your mortgage.
AIB currently offer competive rates and is mainly relying on these competitive rates, rather than cashback offers, to attract new customers.

Haven Mortgage – €2,000 to switchers

Haven Mortgages are offering €2,000 back if you switch your mortgage to them.
The cash will be transferred directly into your current account within two months of drawing down your mortgage.

Haven Mortgage – €5,000 cash back for mortgage over €250,000

Currently, March 2023, Haven Mortgages are offering €5,000 cashback when you borrow €250,000 or more.
The cash will be transferred directly into your current account within two months of drawing down your mortgage. This cash back offer is available to first-time buyers, self-builders, & switchers.

Bank of Ireland – up to 3% cashback

Bank of Ireland offer 3% cashback all first-time buyers, movers, and switchers who have a current account with the bank. You’ll receive 2% cashback after drawing down your mortgage and a further 1% in 5 years’ time. Obviously, the 1% in 5 years time is based on you still having the mortgage with Bank of Ireland. The 2% deal is still available to those who don’t have a current account with the bank.
Example: Let’s look at a home worth €200,00. First-time buyers are permitted to borrow up to 90% of a property’s value or purchase price, whichever is lower, so in this instance, they could get a mortgage worth €180,000.
With the 3% cashback offer, a first-time buyer getting a mortgage of €180,000 could get €5,400 back in cash, €3,600 on drawdown + €1,800 in 5 years’ time.
Figures like this look classy, but it’s essential to consider the long-term cost of the loan before making a decision. See below for more on this…

EBS – 3% cashback

EBS, a subsidiary of AIB, is currently offering 3% cash back as well. Like Bank of Ireland, you’ll receive 2% cashback upfront and a further 1% in 5 years’ time. Provided the mortgage is still with EBS. This deal is available to first-time buyers, movers, and switchers, and, staying with our example above, a first-time buyer could get €3,600 cashback upfront on a €180,000 mortgage and a further €1,800 in 5 years. Unlike BOI’s offer, there’s no requirement to have a current account with the bank to avail of the deal.

Permanent TSB – 2% cashback

Permanent TSB is offering 2% cashback upfront to first-time buyers, movers, and switchers who receive a mortgage offer. Customers who make their mortgage repayments from the bank’s Explore current account will also receive 2% cashback on their monthly mortgage repayments every month until Dec 2027.
So, a €180,000 mortgage would get you €3,600 cashback upfront and then a further €17.26 per month (€207.12 per year) until 2027. (Monthly cashback based on a 3-year fixed rate of 3.10% over a 25-year term paid to 2027, monthly repayment €862.97). As of 31/01/19

Approach cashback offers with caution

These cashback offers may look irresistible to prospective borrowers who are working hard to save up the big deposit needed; however, what will provide a short-term financial gain may lead to long-term repayment pain.

Let’s go back to our example of a €200,000 house with a loan to value (LTV) of 90% – so the mortgage is €180,000. And let’s work with a 25-year term.
Let’s say a bank is offering 2% cashback and is charging an interest rate of 4.2% for this mortgage.
A first-time buyer will receive €3,600 cashback on the drawdown of the mortgage and the cost of credit over the lifetime of the loan will be just over €111,028. Taking the €3,600 cashback away from the cost of credit gives us a sum of €107,428.
Another bank, which is not offering any cashback to first-time buyers, has a rate of 3.2% for borrowers with an LTV of 90%. At this rate, the cost of credit over 25 years will be just over €81,726.

Therefore, in this example, taking 2% cashback in the short term may end up costing you an extra €25,702 in interest over the term of the mortgage.

There are of course other considerations to be taken into account.

Like whether a cheaper fixed-rate option is being offered. Remember, even if a reasonable fixed rate is available, the issue is, what rate will be offered when the fixed rate is up? If the lender is not offering a competitive variable now, will they when the fixed rate is up?
Always remember, your Mortgage term, in most cases, be a lot longer than the fixed rate offered, so when then?

The important message is always seek advice, and always consider the overall cost of credit

While the above example may have you re-considering the idea of taking any cashback offer, there is still something to be said for getting a large lump sum when buying a new home, especially when you consider how expensive a time it can be.
The key is understanding, and considering the interest rate and overall cost of credit over the term of the mortgage first.

We can easily help you work out what the lifetime cost of credit will be for your specific requirements.

Give us a call at 074 910 3938

Quick View Comparison


 Cash Back Offerings

AIB None available to first-time buyers, €2,000 to the switcher
Bank Of Ireland 2% cashback – first-time buyers, movers, and switchers Extra 1% available to BOI current account holders only, after 5 years
Permanent TSB 2% cashback – first-time buyers, movers, and switchers & 2% cash back each month – on mortgage repayments from a PTSB Explore account until Dec 2027
Haven Mortgages  €2,000 cash towards legal fees – availabe to switchers.
Haven Mortgages €5,000 cash towards fees – available to first-time buyers, movers, and switchers who borrow €250,000 or more
EBS  3% cashback – first-time buyers, movers, and switchers. 2% upfront, 1% in 5 years

How we can help?

Our role as mortgage advisors can add significant value to your experience of getting a mortgage. Our mortgage service encompasses much more than form-filling! Our extensive knowledge, market comparison technology, and established relationships with Ireland’s mortgage lenders mean you are in the best hands. We work with and for you and help you through the mortgage process.

The above is for information purposes only and does not constitute financial advice, we recommend that you speak with us before making any financial decisions. We recommend a holistic approach to financial planning and we can help you put your plans in place.

Call us today in Letterkenny: 074 910 3938

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Talk to us now and make an appointment with one of our Letterkenny team of QFAs. We are here to help with your Financial Planning Concerns. Ask us questions on Retirement & Pension, Life Insurance & Protection, Mortgages, and Investment Advice. Get in touch here or give us a call at 074 91 03938.

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