New cashback website helps homeowners pay off their mortgage quicker – The Sun
A NEW cashback website lets homeowners pay off their mortgage quicker by shopping at their favourite retailers.
The free Accelerate My Mortgage (AMM) service makes automatic mortgage overpayments once you've built up a cashback balance of at least £50.
Using the same principle as cashback websites including Quidco and TopCashback, AMM has partnered up with 45 retailers so far including Asos, Boots, Iceland, Topman and Wilko.
Homeowners can do their shopping through the website, and every penny earned as cashback will later go to pay off your mortgage.
The top cashback interest rates on offer are currently 15 per cent at Moonpig and Topman, meaning if you spent £50 in a month at either retailer, you'd earn £7.50 in cashback.
This means you could reduce your outstanding mortgage balance by an extra £90 in a year, but you'd also save money on interest.
How to switch your mortgage
HERE'S what the Money Advice Service says you should watch out for when you're thinking about switching your mortgage:
- When to switch your mortgage. You should check if you can save by switching your mortgage when your current deal is about to come to an end, if your lender changes your interest rate, or once a year if you're not tied into a deal with early repayment penalties.
- How to find the best deal. You can use comparison websites to search for the best mortgage deal or, if you need a bit more help deciding what's best, use a broker. If you use a broker, check what fees it charges and if it can look for deals across the entire mortgage market.
- Check for remortgage costs. There might be high early repayment charges to pay if you are leaving before the initial fixed period ends, and there may also be an exit fee if you leave your existing lender. When it comes to the new lender, you might be charged valuation and legal fees as well as a booking or arrangement fee. So check that it's worth switching once the fees have been taken into account.
In comparison, Quidco currently offers 18 per cent in cashback at Moonpig and 3 per cent at Topman, while TopCashback offers a rate of 7 per cent at Topman only.
Just make sure to double-check the terms of your mortgage deal first, as some will be penalised for making overpayments.
Lenders typically allow borrowers to overpay 10 per cent a year of the outstanding balance.
AMM told The Sun it'll transfer the funds directly to you if its cashback rewards push you above the yearly overpayment balance.
Keen to try it? You should only use cashback websites if you need to buy something, or else you're saving any money.
How does it work?
To sign up for the cashback rewards, you need to create an account on the Accelerate My Mortgage website.
You then upload information about your mortgage including when your deal expires, but you don't need to use the site to arrange the mortgage.
Once you've racked up a cashback balance of at least £50, AMM will transfer the cash to your mortgage provider.
The service will have the details of your mortgage account, meaning you don't need to get involved in the process.
What do the experts think?
Peter Gettins of L&C Mortgages told The Sun the "ability to make overpayments effectively without noticing could well have some appeal".
But he and Paula Higgins, chief executive of HomeOwners Alliance, warned homeowners to be aware of early repayment and overpayment charges as it could wipe out the cashback.
Mr Gettins added: "Mortgages are generally the cheapest form of debt people are likely to have (in terms of interest rate), so if there are any other debts like credit card balances, unsecured loans or overdrafts it’s better to pay those off first.
"So in that case it may be better to sign up for a cashback scheme that pays money directly to you, and use it to clear the most expensive debts first."
Meanwhile, Andrew Hagger of Moneycomms, said: "Paying extra money off your mortgage is a smart move as it cuts your interest bill and reduces the term of your mortgage.
"However, buying from a limited number of retailers means you may not be getting the best deal on your purchase – so you could potentially get a better deal if you looked at the whole retail market and save more than the cashback you're being offered."
Full list of the retailers signed up to AMM so far
THE cashback website has signed up 45 retailers so far.
- American Golf (up to 5 per cent cashback)
- AO (up to 2.5 per cent cashback)
- ASOS (up to 10 per cent cashback)
- Avis (up to 8 per cent cashback)
- boohooMAN (up to 7 per cent cashback)
- Boots (up to 5 per cent cashback)
- Clarks (up to 3 per cent cashback)
- Currys PC World (up to 1 per cent cashback)
- Debenhams (up to 1 per cent cashback)
- Dorothy Perkins (up to 6 per cent cashback)
- Footasylum (up to 4 per cent cashback)
- Groupon (up to 9 per cent cashback)
- Hamleys (up to 4 per cent cashback)
- Hotels.com (up to 6 per cent cashback)
- Iceland (up to 3 per cent cashback)
- John Lewis (up to 7 per cent cashback)
- Love Energy Savings (up to £50 cashback)
- Made (up to 7 per cent cashback)
- MandM Direct (up to 10 per cent cashback)
- Moonpig (up to 15 per cent cashback)
- M&S (up to 2 per cent cashback)
- Muscle Food (up to 7 per cent cashback)
- Music Magpie (up to 7 per cent cashback)
- NCP (up to 5 per cent cashback)
- Not On The High Street (up to 3 per cent cashback)
- On the Beach (up to 6 per cent cashback)
- Opodo (up to 7 per cent cashback)
- Papa John's (up to 1 per cent cashback)
- Pizza Hut (up to 5 per cent cashback)
- PureGym (up to £2.50 cashback)
- Ryman (up to 3 per cent cashback)
- Schuh (up to 3 per cent cashback)
- Scribbler (up to 9 per cent cashback)
- Slater Menswear (up to 4 per cent cashback)
- Sports Direct (up to 1 per cent cashback)
- Superdrug (up to 2 per cent cashback)
- Tastecard (up to £5 cashback)
- Topman (up to 15 per cent cashback)
- Trainline (up to 3 per cent cashback)
- Travelzoo (up to 6 per cent cashback)
- Vistaprint (up to 9 per cent cashback)
- Vodafone (up to £10 cashback)
- Waterstones (up to 4 per cent cashback)
- Wilko (up to 2 per cent cashback)
- Zavvi (up to 8 per cent cashback)
Last year, an online tool promised to help homeowners find a better deal on their mortgage almost instantly – and it could save you thousands of pounds a year.
While a new Habito tool lets first-time buyers make cash offers while they wait for mortgages.
Homebuyers can also check whether they'll be eligible for a mortgage without it hitting their credit score.
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