LIBF CeMAP (Certificate in Mortgage Advice and Practice) — All Questions

Which statement about interest-only lending under current MCOB rules is correct?

• a.They are permitted where there is a credible repayment strategy that the lender evidences✓
• b.No repayment strategy is ever required
• c.Interest-only mortgages are banned
• d.They are available only to customers who are over sixty years of age and already own a second property outright

Interest-only lending is allowed, not banned, provided the lender obtains evidence of a credible strategy to repay the capital and assesses affordability of the interest (MCOB 11.6.41). The MMR tightened the rules but did not prohibit interest-only mortgages.

The stress test in MCOB 11.6 is designed to protect against the risk that:

• a.House prices fall
• b.The customer moves house
• c.The customer changes job voluntarily
• d.Interest-rate rises during the early years make the mortgage unaffordable✓

The stress test requires the lender to check affordability against a plausible future rise in interest rates over the first five years, guarding against borrowers taking on payments they could only afford at unusually low rates (MCOB 11.6.18).

A lender that ignores a customer's large existing car-finance commitment when assessing affordability is likely to breach MCOB because it has failed to account for:

• a.Committed expenditure✓
• b.The APRC
• c.The property's rebuild cost
• d.The valuation fee

Existing finance such as car loans is committed expenditure that must be deducted from income in the MCOB 11.6 affordability assessment. Overlooking it overstates how much the customer can afford and risks irresponsible lending.

The responsible-lending framework treats the lender's decision to lend as depending primarily on:

• a.The customer's ability to repay from income and resources✓
• b.The customer's willingness to pay a high fee
• c.The value of the property offered as security alone, without any regard to the borrower's income at all
• d.The size of the deposit only

A central MMR principle is that lending must be based on the borrower's ability to repay, not on the security's value in the hope of selling it if the borrower defaults. MCOB 11.6 therefore centres on income and affordability rather than the property alone.

For a mortgage with a two-year fixed rate followed by a variable rate, the stress test under MCOB 11.6 must:

• a.Only apply if the customer asks
• b.Assume the rate can never change after the fix
• c.Be applied, because the fixed period is shorter than five years✓
• d.Be ignored because the first two years are fixed

The stress test is disapplied only where the rate is fixed for at least five years. A two-year fix is shorter than that, so the lender must apply the stress test, checking affordability against a plausible rate rise once the fixed period ends (MCOB 11.6.18).

A customer wants to borrow the maximum a lender's income-multiple calculator allows, but the affordability assessment shows the payments would leave too little for essential spending. The lender should:

• a.Reduce essential expenditure figures to make it fit
• b.Lend the customer the maximum income multiple regardless of what the detailed affordability figures actually show
• c.Lend only what the affordability assessment shows is sustainable✓
• d.Increase the income multiple

Income multiples are a cap, not a target. MCOB 11.6 requires the actual lending decision to be driven by a genuine affordability assessment, so where affordability is tighter than the maximum multiple, the lender must lend only the sustainable amount.

A responsible lender assessing affordability for a couple where one partner plans to stop work to care for a child should:

• a.Refuse to lend to any couple
• b.Assume both incomes continue unchanged
• c.Take account of the foreseeable reduction in household income✓
• d.Ignore the couple's expenditure

MCOB 11.6.14 requires foreseeable changes in income or expenditure that will affect affordability to be taken into account. A known plan for one partner to stop working reduces future household income and must be reflected in the assessment.

The Consumer Duty reinforces responsible lending by requiring firms to avoid causing:

• a.Any documentation
• b.Competition between lenders
• c.Any profit for the lender
• d.Foreseeable harm to customers✓

Under Principle 12 and PRIN 2A, firms must act to avoid causing foreseeable harm to retail customers. Lending that the firm can foresee will be unaffordable, or that offers poor value, would cause foreseeable harm and breach the Consumer Duty as well as MCOB 11.

Which document produced during the sales process most directly warns the customer how their payments could change if interest rates rise?

• a.The Land Registry title document for the property being purchased by the borrower under the mortgage
• b.The ESIS, including its illustrative higher APRC and payment information✓
• c.The buildings insurance schedule
• d.The estate agent's particulars

The ESIS sets out the payments and, under the MCD, an illustrative higher APRC, alerting the customer to how costs could rise. This customer-facing disclosure complements the lender's internal MCOB 11.6 stress test.

A lender offering a product transfer to an existing customer with no additional borrowing may, under the FCA's rules, apply:

• a.A full and complete new affordability assessment in every single case, exactly as for brand-new borrowing
• b.The Consumer Credit Act instead of MCOB
• c.A simplified approach, since a like-for-like switch does not increase the customer's debt✓
• d.No conduct rules at all

For a straight product transfer or rate switch with no extra borrowing, the customer's debt does not increase, so MCOB does not require a full new affordability assessment. This supports customers switching to a better rate without being trapped, echoing the modified-affordability aims.

MCOB 11.6 requires that the affordability of any additional borrowing (a further advance) is assessed:

• a.Without any income evidence
• b.Using only the income figure the customer had recorded back when they first took out the original mortgage
• c.By assuming income will rise
• d.On the customer's current income and expenditure at the time of the further advance✓

A further advance increases the customer's debt, so MCOB 11.6 requires a fresh affordability assessment based on current, verified income and expenditure, ensuring the increased borrowing is sustainable at the time it is taken on.

The affordability rules aim to ensure that mortgage lending is sustainable, meaning the customer can:

• a.Rely on the property being sold to clear the debt
• b.Stop paying whenever they wish
• c.Meet the repayments without undue difficulty over the life of the mortgage✓
• d.Repay the mortgage only in the event that they happen to win a large sum of money at some future point

Sustainable lending under MCOB 11.6 means the customer can realistically maintain the repayments from income and resources throughout the term, without the arrangement depending on selling the property or on unlikely windfalls.

A lender that grants a mortgage it knows the customer cannot afford, relying on repossessing and selling the home if the customer defaults, would breach the responsible-lending principle that:

• a.Affordability is the customer's problem
• b.Repossession is always the first step
• c.Lending must be based on the customer's ability to repay, not on the security✓
• d.Property value alone justifies lending

MCOB 11.6 was designed to stop lending that ignores affordability and relies on the property as security. Lending on that basis breaches the responsible-lending duty and the requirement to avoid foreseeable harm under the Consumer Duty.

Where a customer has an interest-only mortgage relying on the sale of the mortgaged property itself as the repayment strategy, MCOB requires the lender to:

• a.Assume the property will always be worth enough
• b.Be satisfied there will be sufficient equity, applying appropriate criteria and prudence✓
• c.Ban interest-only outright
• d.Accept the customer's plan to sell the property without question in absolutely every case that arises

Sale of the mortgaged property can be an acceptable interest-only strategy, but MCOB 11.6 requires the lender to apply prudent criteria, for example a suitable equity buffer and realistic assumptions, rather than assuming the sale will always cover the outstanding capital.

The affordability assessment should be carried out:

• a.Before the lender enters into the mortgage contract✓
• b.Only if the customer later falls into arrears
• c.Only after completion
• d.A year into the mortgage

MCOB 11.6.2 requires the affordability assessment to be completed before the lender enters into the regulated mortgage contract, because its purpose is to prevent unaffordable lending from being advanced in the first place.

A lender using an income-multiple limit alongside affordability is applying it as:

• a.A minimum that must always be lent
• b.A replacement for verifying income
• c.An upper cap that the affordability assessment may reduce further✓
• d.A fixed, guaranteed amount that every single customer who applies will then automatically receive from the lender

An income multiple acts as a maximum ceiling on borrowing. The actual amount lent must still pass the MCOB 11.6 affordability test, which may permit less than the maximum multiple where the customer's expenditure or the stress test dictates.

A customer receiving state benefits that are expected to continue asks for these to be counted as income. The lender should:

• a.Consider whether the benefits are sustainable and evidenced before including them✓
• b.Count them without any checks
• c.Always refuse outright to count any form of state benefit as part of the customer's assessable income
• d.Double the value of the benefits

MCOB 11.6 requires income used in the assessment to be evidenced and reasonably expected to continue. Sustainable benefit income can be considered where verified, applying the same prudence used for other income sources, so affordability rests on reliable figures.

Which of the following best reflects a lender's obligation when a customer's declared expenditure looks implausibly low?

• a.Ignore expenditure altogether
• b.Apply realistic minimum expenditure assumptions rather than relying on unrealistically low self-declared figures✓
• c.Simply accept the implausibly low expenditure figures at face value in order to approve a larger amount of borrowing
• d.Ask the customer to reduce their income figure instead

MCOB 11.6 expects a realistic assessment of expenditure. Lenders commonly use statistical or modelled minimum figures where self-declared expenditure is implausibly low, so affordability is not overstated by unrealistic customer estimates.

The FCA's responsible-lending rules apply the affordability assessment to the customer as borrower, which means the lender is chiefly concerned with the customer's ability to:

• a.Sell the property quickly
• b.Increase the property's value
• c.Repay the mortgage from income and resources over its term✓
• d.Obtain a second mortgage

Responsible lending centres on the borrower's capacity to repay from sustainable income and resources throughout the term (MCOB 11.6), reflecting the MMR's shift away from lending decisions dominated by the security's value.

An adviser notes that a customer could afford a mortgage now but that a fixed-term maintenance obligation ends in three years, increasing disposable income. For affordability this future change is:

• a.A foreseeable improvement the lender may take into account with appropriate care✓
• b.Irrelevant to MCOB
• c.Ignored altogether simply because the change lies at some point in the future rather than in the present
• d.A reason to refuse the mortgage

MCOB 11.6.14 requires foreseeable changes in income and expenditure to be considered. A known, dated reduction in outgoings is a foreseeable change; the lender may take it into account prudently, just as it must consider foreseeable reductions in income.

Which of the following would be an example of irresponsible lending contrary to MCOB 11?

• a.Carefully verifying the customer's income and fully assessing their expenditure before agreeing to lend to them
• b.Reviewing an interest-only repayment strategy during the term
• c.Lending on an interest-only basis with no credible repayment strategy and no affordability check✓
• d.Applying an interest-rate stress test to a two-year fix

Granting interest-only lending without a credible repayment strategy and without assessing affordability directly contravenes MCOB 11.6.41 and the responsible-lending duty. The other options are examples of the compliant behaviour the rules require.

A lender's responsible-lending policy should be:

• a.Written, consistently applied and capable of demonstrating how affordability is assessed✓
• b.Different for every customer with no consistency
• c.Kept solely in the individual adviser's own memory rather than being written down anywhere at all
• d.Designed to maximise arrears

MCOB 11.6.20 requires a written responsible-lending policy that the lender applies consistently and can evidence to the FCA, ensuring affordability decisions are principled and demonstrable rather than arbitrary.

When a customer applies to remortgage to a new lender for the same amount to get a lower rate, and passes the standard tests, the affordability assessment protects the customer by:

• a.Removing the need for a valuation
• b.Confirming the new, cheaper mortgage remains affordable for them✓
• c.Guaranteeing the property will rise in value
• d.Fixing the rate for life

Even on a remortgage to a cheaper rate, MCOB 11.6 requires the new lender to assess affordability so the switch is sustainable. Where a like-for-like customer would otherwise fail, modified-affordability provisions may assist, but the aim throughout is affordable, sustainable lending.

The MMR and MCOB 11.6 require income verification chiefly to prevent:

• a.Loans being granted on overstated or unproven income✓
• b.Lenders offering fixed rates
• c.Customers repaying early
• d.Customers using mortgage brokers

Income verification exists to stop lending based on inflated or unproven income, a practice associated with pre-MMR self-certification. Requiring evidence of income underpins a reliable affordability assessment and responsible lending under MCOB 11.6.

A borrower wants an interest-only mortgage intending to switch to repayment 'at some point' but has no plan or evidence for how. Under MCOB the lender should:

• a.Not treat a vague future intention as a credible repayment strategy✓
• b.Grant the interest-only mortgage simply because the customer's stated intention appears to be a good one
• c.Grant it and review it only at the very end
• d.Assume the customer's salary will clear the capital

MCOB 11.6.41 requires a clearly understood, credible and evidenced repayment strategy. A vague, unplanned intention to switch to repayment 'at some point' is not credible or evidenced, so the lender should not rely on it to justify interest-only lending.

The main risk that responsible-lending rules seek to reduce for the customer is:

• a.Taking on a mortgage they cannot sustainably afford, risking arrears and repossession✓
• b.Receiving too much advice
• c.Choosing a fixed rate
• d.The customer paying off their mortgage far too quickly and losing the benefit of a low introductory rate

By requiring income verification, expenditure assessment and stress testing, MCOB 11.6 aims to prevent borrowers taking on unaffordable mortgages that could lead to arrears and, ultimately, repossession, protecting both consumers and market stability.

A lender assessing affordability for a customer whose income is partly in a foreign currency should:

• a.Convert it at the most favourable possible rate and rely on that
• b.Assume the exchange rate can only improve
• c.Take reasonable account of exchange-rate risk affecting the sustainability of that income✓
• d.Ignore all foreign-currency and exchange-rate issues entirely when working out the customer's income

Where income or the loan involves foreign currency, MCOB and the MCD require the lender to consider exchange-rate risk to affordability and provide relevant warnings. Reliable, sustainable income is central to a proper MCOB 11.6 assessment, so currency volatility must be weighed.

Under MCOB 11.6, if a mortgage is affordable at the current pay rate only because the borrower relies on substantial regular overtime, the lender should:

• a.Refuse to lend to anyone who works overtime
• b.Always count every hour of the customer's overtime in full, exactly as though it were guaranteed basic pay
• c.Assess how reliable and sustainable the overtime is before relying on it✓
• d.Ignore basic salary and use overtime only

Overtime is variable income, so MCOB 11.6 requires the lender to judge its reliability and sustainability, often counting only a prudent proportion, so that affordability is not built on income that may not continue.

A key difference between the pre-MMR and post-MMR approach to affordability is that, after the MMR:

• a.Customers are able to self-certify their own income far more freely than they ever previously could
• b.Lenders rely mainly on the property's value
• c.There is no stress testing of interest rates
• d.Lenders must verify income and assess affordability, taking responsibility for the decision✓

The MMR made lenders responsible for verifying income and assessing affordability, including stress testing, ending self-certification and the reliance on rising property values that characterised some pre-MMR lending (MCOB 11.6).

Bringing together income verification, expenditure assessment, the stress test and interest-only strategy checks, the overall aim of MCOB 11 responsible lending is to ensure that:

• a.Mortgages are only granted where the customer can afford them sustainably over the term✓
• b.Property values always rise
• c.Advisers earn the largest procuration fees
• d.Lenders should lend as much money as they possibly can to every single customer who comes through the door

MCOB 11's tools, income verification, expenditure assessment, the interest-rate stress test and interest-only repayment-strategy checks, all serve one aim: to ensure mortgages are granted only where they are genuinely and sustainably affordable for the customer throughout the term.

In the early years of a capital-and-interest (repayment) mortgage, each monthly payment is made up of:

• a.mostly interest, with only a small amount reducing the capital✓
• b.an equal split of capital and interest that never changes for the whole term
• c.mostly capital, with only a small amount of interest
• d.interest only, with no capital repaid until the final year of the mortgage

On a repayment mortgage interest is charged on the outstanding balance, which is highest at the start, so early payments are mostly interest and repay little capital; as the balance falls the capital-repayment element grows. The loan is still cleared by the end of the term.

A 'part-and-part' mortgage is one where:

• a.part of the balance is repaid on a capital-and-interest basis and part on an interest-only basis✓
• b.the loan is split equally between a fixed rate and a tracker rate for the whole term
• c.two borrowers each take half of the loan on completely separate terms and rates
• d.half of the interest is paid now and the other half is deferred to the end of the term, unless the borrower and lender later agree otherwise

Part-and-part combines a repayment element (which reduces the capital over the term) with an interest-only element (which relies on a separate repayment strategy), reducing the monthly cost compared with full repayment. A credible plan is still required for the interest-only portion under MCOB 11.

A borrower takes an interest-only mortgage and plans to repay the capital from a stocks-and-shares ISA. The main risk the adviser must highlight is that:

• a.the mortgage interest rate must be fixed for the whole of the mortgage term
• b.the ISA must be surrendered to the lender at the end of each policy year
• c.ISA contributions are always taxed when they are withdrawn to repay the loan, subject to the usual terms and conditions that apply
• d.the investment may not grow enough to repay the capital in full at the end of the term✓

With an investment-backed repayment vehicle such as an ISA, growth is not guaranteed, so there is a risk of a shortfall between the fund's value and the capital owed at the end of the term. The borrower should review the plan regularly; ISA proceeds are themselves tax-free.

A traditional endowment mortgage combines an interest-only loan with:

• a.a fixed-rate savings bond whose maturity value is guaranteed by the lender
• b.a personal pension that must be partially cashed in at the end of each year
• c.a buildings insurance policy that also builds up a savings value over the term, and this remains the position for the whole of the mortgage term
• d.a with-profits or unit-linked life policy intended to repay the capital and provide life cover✓

An endowment mortgage pairs an interest-only loan with an endowment (life-assurance investment) policy designed to build a lump sum to repay the capital while also providing life cover. Many endowments produced shortfalls, which is why lenders now require evidence of a credible repayment strategy.

Under a pension-linked interest-only mortgage, the capital is intended to be repaid from:

• a.a guaranteed further advance that the lender promises at the end of the term
• b.the borrower's ongoing state pension income once it comes into payment
• c.the tax-free lump sum available from the borrower's pension at retirement✓
• d.the sale of the borrower's household contents and personal possessions

A pension mortgage uses the tax-free pension commencement lump sum to repay the interest-only capital at retirement. Because it relies on future investment performance and pension rules, the adviser must confirm the projected lump sum is a credible strategy and warn of the risk to retirement provision.

At the end of a two-year fixed-rate period, unless the borrower takes further action the mortgage will usually:

• a.continue at exactly the same fixed rate for the remainder of the mortgage term
• b.revert to the lender's standard variable rate (SVR)✓
• c.switch automatically from a repayment basis to an interest-only basis
• d.be repaid in full automatically from the borrower's linked savings account

A fixed rate applies only for the stated initial period; afterwards the mortgage moves to the lender's reversion rate, normally the SVR, which is often higher. Borrowers frequently remortgage or take a new product ('product transfer') at that point to avoid the SVR.

The lender's standard variable rate (SVR) is best described as:

• a.a rate that is fixed and unchangeable for the entire life of the mortgage loan, for the full duration of the mortgage agreement
• b.a rate that by contract always exactly equals the Bank of England Bank Rate
• c.a promotional rate that is guaranteed by the lender never to rise at all
• d.a variable rate set at the lender's own discretion, which the lender can change✓

The SVR is the lender's default variable rate, which it sets and can change at its discretion; it is not contractually tied to the Bank Rate, although lenders often move it broadly in line with wider rates. A tracker, by contrast, is contractually linked to a named benchmark.

A 'collar' on a variable or tracker mortgage is:

• a.a lump-sum cashback that the lender pays to the borrower on completion
• b.a maximum rate above which the interest rate the borrower pays cannot rise
• c.a minimum rate below which the interest rate will not fall✓
• d.a penalty charged to the borrower for repaying the mortgage early

A collar sets a floor beneath which the pay rate cannot fall, even if the benchmark drops further, so the borrower stops benefiting from rate cuts below that level. A cap is the opposite of a collar: a ceiling above which the rate cannot rise.

A borrower buys a property valued at £250,000 with a £50,000 deposit and a £200,000 mortgage. The loan-to-value (LTV) ratio is:

• a.80%✓
• b.125%
• c.25%
• d.20%

LTV = loan / property value x 100 = 200,000 / 250,000 x 100 = 80%. The remaining 20% is the borrower's deposit (equity). A lower LTV generally gives access to lower interest rates because the lender's risk is smaller.

A property is being bought for £300,000 but the lender's valuation is £290,000. For a £232,000 loan, the lender will calculate LTV using the:

• a.£300,000 purchase price, giving an LTV of about 77%
• b.combined price and valuation added together, giving an LTV of about 39%
• c.£232,000 loan amount, giving an LTV of 100%
• d.£290,000 valuation, giving an LTV of 80%✓

Lenders base LTV on the lower of the purchase price and the valuation. 232,000 / 290,000 x 100 = 80%. Using the lower figure protects the lender if the price paid exceeds the property's assessed value; the buyer must fund any difference.

A lender offers a maximum 90% LTV on a property valued at £400,000. The smallest deposit the borrower must provide is:

• a.£36,000
• b.£360,000
• c.£4,000
• d.£40,000✓

At 90% LTV the maximum loan is 90% x 400,000 = 360,000, so the borrower must fund the remaining 10%, which is 40,000. The 360,000 figure is the loan, not the deposit.

On a £150,000 interest-only mortgage charged at 4.8% per year, the monthly interest payment is approximately:

• a.£720
• b.£600✓
• c.£480
• d.£1,200

Annual interest = 150,000 x 4.8% = 7,200; divided by 12 = 600 per month. On an interest-only loan the capital does not reduce, so the payment stays at this level while the rate is unchanged.

A borrower has a £200,000 interest-only mortgage at a fixed rate of 3% per year. Ignoring any fees, the monthly payment is:

• a.£500✓
• b.£1,000
• c.£6,000
• d.£600

200,000 x 3% = 6,000 interest per year, which is 500 per month. Because it is interest-only, none of the 200,000 capital is repaid through these payments; a separate repayment strategy is needed.

Compared with an interest-only mortgage for the same amount, rate and term, a capital-and-interest (repayment) mortgage will normally have a:

• a.higher monthly payment, but a balance that falls over the term✓
• b.lower monthly payment, because part of the interest is deferred to the end
• c.monthly payment and outstanding balance that are identical throughout
• d.monthly payment of zero, with everything settled at the end of the term

A repayment mortgage's monthly payment is higher because it includes capital as well as interest, but the outstanding balance reduces over time and is cleared by the end of the term. Interest-only payments are lower but leave the full capital outstanding.

A borrower has a £200,000 offset mortgage and £50,000 in a linked savings account. Interest is charged on:

• a.£50,000
• b.£150,000✓
• c.£200,000
• d.£250,000

An offset mortgage sets linked savings against the mortgage balance, so interest is charged only on the net figure: 200,000 - 50,000 = 150,000. The saver forgoes credit interest, but the effective benefit is at the (usually higher) mortgage rate and free of tax on that interest.

A key advantage of an offset mortgage for a higher-rate taxpayer with significant savings is that:

• a.the benefit is equivalent to earning tax-free interest at the mortgage rate on the offset savings✓
• b.the lender pays the borrower a guaranteed annual bonus on the savings
• c.the linked savings are locked away and cannot be accessed for the whole term, and this remains the position for the whole of the mortgage term
• d.the mortgage interest rate is always fixed for the full life of the loan

Because offsetting reduces mortgage interest rather than paying taxable savings interest, the saver effectively 'earns' the mortgage rate tax-free on the offset balance, which is particularly valuable to higher-rate taxpayers. The savings usually remain accessible, unlike a fixed-term deposit.

A current account mortgage (CAM) differs from a standard offset mortgage in that it:

• a.is available only to limited companies and not to individual borrowers, whatever the borrower's own individual circumstances happen to be
• b.can never be overpaid by the borrower under any circumstances at all
• c.combines the mortgage, savings and current account into a single running balance✓
• d.charges interest only once a year, calculated on an annual-rest basis

A current account mortgage merges borrowing and day-to-day banking into one account, so the whole balance offsets and the borrower sees a single net figure. It offers flexibility but requires discipline, as the large 'overdraft' can tempt overspending.

Which feature is characteristic of a flexible mortgage?

• a.the ability to make overpayments and underpayments and to take payment holidays✓
• b.a contractual ban on making any overpayment for the whole mortgage term, unless the borrower and lender later agree otherwise
• c.a compulsory fixed rate that cannot be changed once the mortgage starts
• d.interest that is charged strictly on an annual-rest basis only

Flexible mortgages typically allow overpayments (reducing the term or balance), underpayments and payment holidays, and often 'borrow-back' of previous overpayments. They usually calculate interest daily so that overpayments reduce interest immediately.

A mortgage that calculates interest on a 'daily rest' basis benefits the borrower because:

• a.the interest rate is always lower than the Bank of England Bank Rate
• b.overpayments reduce the interest charged straight away✓
• c.no interest at all is charged during the first year of the mortgage
• d.the mortgage term is fixed and can never be shortened or extended

With daily interest calculation the balance is recalculated each day, so any overpayment reduces the interest-bearing balance immediately. On an annual-rest basis, overpayments during the year may not reduce interest until the annual recalculation, which is less advantageous.

A 'cashback' mortgage provides the borrower with:

• a.a lump sum, usually paid on completion✓
• b.an interest-free period at the start of the mortgage term
• c.a reduction in the interest rate that is guaranteed for a full five years
• d.an automatic waiver of the lender's valuation fee only

A cashback mortgage pays the borrower a lump sum (a fixed amount or a percentage of the loan) on completion, which can help with moving costs. The headline rate is often higher to fund the cashback, and early repayment may require some cashback to be returned.