08/11/2026
Today's tip is about Mortgage Cashbacks.
1. What is a Cashback Mortgage?
The lender provides a cash incentive at the time of closing.
2. How much can the borrower receive ?
Cash back is often a percentage of the mortgage amount. Some lenders will have the option of 1%, 2%, 3% or 5% of the mortgage amount at the borrowers request provided they qualify. In this case, the amount received may be used for anything but the down payment.
Some lenders offer a smaller cash incentive equal to the closing costs in order to offset these expenses.
3. What are the drawbacks?
The cash incentive is repaid over the term of the mortgage, and if the mortgage is paid early, before maturity, then a prorated amount of the cash will need to be repaid.
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