Cashback and green mortgage rates: are they worth it?

Cashback is paid once; a higher rate costs you every month. Compare the cashback with the extra interest over the years you expect to keep the loan.

Lenders compete with offers as well as rates. According to Citizens Information, a cashback mortgage pays you a percentage of the loan in cash. For example, 2% at drawdown and 1% after five years. A green mortgage offers a lower fixed rate for a home with a good Building Energy Rating (BER).

What the rules say about incentives

The Central Bank's Consumer Protection Regulations treat cashback, payment breaks and similar short-term offers as "incentives". These may help now but can cost more over the whole term. Lenders must:

• show, before approval, a cost comparison of the loan with and without the incentive (Regulation 177)
• warn you to consider the total cost of the loan, including any extra cost of the incentive, on calculators, approvals in principle and adverts
• say you may wish to get independent advice before taking an incentive

Cashback against a lower rate

An illustrative choice on a €300,000 loan over 30 years: 3% cashback (€9,000) at 4.0%, or no cashback at 3.7%. These are not quotes.

In this example the extra interest overtakes the cashback in year 11. Before then the cashback offer is ahead; after it, the lower rate is. If you expect to switch or sell soon, cashback can come out ahead; for a long stay, the rate matters more. Read the terms for when each part of the cashback is paid.

Green rates

If your home qualifies, a green rate is a straight saving. On the same loan, a rate 0.2 points lower saves €2,937.78 of interest over five years. Ask what BER is needed, whether a new BER certificate is required, and what rate applies when the green fixed period ends.

How to compare

• work out the extra interest over the years you'll actually keep the loan, and set the cashback against it
• remember a fixed rate's early repayment charge if you might switch
• use the total cost figure lenders must give you, not the monthly repayment alone

Work it out

• Mortgage repayments and amortisation →

Sources

• Central Bank of Ireland: Consumer Protection Regulations, Part 3, Regulation 182: affordability test at a minimum 2% rate increase (checked 24/10/2026)
• Central Bank of Ireland: Mortgage measures (loan-to-income 4x / 3.5x, deposits 10% / 30%) (checked 24/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.