Leeds launches 3 per cent cashback mortgage

The deal, which is available via intermediaries, applies early repayment charges for the first three years and is subject to a £199 booking fee. Early redemption requires the repayment of the cashback value, but there is no higher lending charge.

Phil Coombes, head of intermediary sales at Leeds Building Society, said: "This is an innovative product which will be attractive to clients looking to minimise up front costs. The 3% cashback provides excellent flexibility so borrowers can use the money to suit their circumstances, perhaps to reduce the amount of deposit required, pay legal expenses or pay for household furnishings and improvements, all of which can be barriers to home ownership.

"There is no doubt that this mortgage will be popular with clients who require up to 80% LTV. Not only does the cashback provide borrowers with funds to use as they wish, it effectively reduces the interest rate to 4.69% over the three years during which an early repayment charge would apply, meaning excellent value for a product with this level of flexibility.”

The mortgage is fully portable meaning borrowers wanting to move home can take this product with them without penalty.