However, experts have warned that in many cases, the goodies that come with the deal are not worth the extra money.
A number of the top high street lenders now offer a range of ‘free’ extras to borrowers who take out a mortgage with them. The freebies range from getting a free valuation to gift cards, supermarket loyalty points and vouchers. Lenders hope the lure of getting a free gift thrown in will entice customers to take out their product, even if it is not the most competitive on the market.
A spokesperson from mortgage broking specialist, Trinity Financial, Aaron Strutt, said many of the deals often included a ‘catch’ and urged people to shop around before signing on the dotted line.
However, not all of the deals are worthless and ones which include a free valuation or discounted legal fees may be particularly useful. First time buyers often struggle to scrape together enough cash for the deposit, the costs of moving, plus all the legal fees. Having to find less for the initial outlay could be more helpful, say some experts, such as London and Country mortgage broker, David Hollingworth.
In addition, borrowers who only have a small choice of mortgages and loans to pick from, may find the small benefits from the freebies better than the alternatives. This could be especially relevant for those who only have a small deposit.
If, however, you are one of the majority of borrowers who has the option of picking from a range of subjects, experts are suggesting you calculate the true financial worth of the freebie and the compare the higher costs you will pay, before you decide if you really are getting a good deal.