A cash back mortgage gives you extra cash to spend after buying a home.
After getting approved for a mortgage that offers cash back, you can use the extra cash to offset closing costs, buy new appliances, pay for renovations, and cover other expenses.
Read on to learn about the best mortgage cash back offers in Canada.
What is a Cash Back Mortgage and How Does It Work?
A cash back mortgage allows you to borrow an additional amount on top of your mortgage loan.
The lump sum ‘cash back’ is a percentage of the mortgage loan and is typically between 1% and 7% of the mortgage amount.
For example, if you are approved for a $500,000 mortgage that includes a 5% cash back, you will receive an extra $25,000 (5% x $500,000) in cash back.
Your total debt becomes $525,000. Your monthly payment will include interest on both portions of your total debt (mortgage and loan). This cash back is paid out on the date your mortgage is advanced.
The other type of mortgage cash back shown below is the cash bonuses provided by some banks when you are approved for a mortgage loan.
This type of mortgage cash back is not a loan and is a marketing strategy to attract borrowers who are looking for an incentive to close with one bank over another.
The cash bonus you receive is free and clear of interest fees.
Best Mortgage Cash Back Offers in Canada
The banks listed below offer cash back mortgages, mortgage approval cash back bonuses, or both.
Tangerine Mortgage Cash Back
Offer **expired**: Get up to a $5,000 bonus when you are approved for a Tangerine mortgage of at least $350,000. This offer is available until October 31, 2022.
How it works: Submit a mortgage application for a home purchase and a 5-year variable or 5-year fixed rate. Following approval, you receive a cash bonus based on your mortgage loan amount.
| Mortgage Amount | Bonus Amount |
| $350,000 to $749,999 | $2,000 |
| $750,000 and above | $5,000 |
The cash bonus is paid into your Tangerine Chequing Account within 30 days of funding your mortgage. If you don’t have a Tangerine Chequing account, you can open one for free (has no monthly fees).
Learn about the current Tangerine mortgage rates or visit their website.
CIBC Cash Back Mortgage
There are two ways to earn cash back with CIBC mortgages (they can’t be combined).
A CIBC Wealth Builder Mortgage is available in 3, 4, 5, 7, and 10-year fixed-rate terms. You receive a 1% cash back upfront and extra cash payments each quarter.
For example, on a $250,000 mortgage and a 5-year term, you could get $2,500 upfront and $100 each quarter over a 5-year term ($2,000), for a total of $4,500.
CIBC also has a cash bonus offer running until January 31, 2023.
To qualify, you must be approved for a mortgage amount of $100,000 or more and a fixed-rate mortgage of 4 years or more, or a 5-year CIBC Variable flex mortgage loan.
The bonus amounts vary with the size of the loan:
| Mortgage Amount | Bonus Amount |
| $100,000 to $499,999 | $1,000 |
| $500,000 to $749,999 | $2,100Â |
| 750,000 to $999,999 | $3,100 |
| $1,000,000 or more | $4,100 |
Cash back is deposited in your CIBC chequing account within 6-8 weeks of funding.
TD Mortgage Cash Back
TD does not offer a traditional cash back mortgage; however, you can take advantage of its cash bonus offer.
Offer: Get up to a $3,000 cash bonus when you fund a TD mortgage or set up a TD Home Equity FlexLine with a term portion. This offer is available until August 31, 2022. *closed*
How it works: Your TD mortgage can be for a new home purchase, refinance, or you can switch your existing mortgage to TD. Also, the new principal must be at least $150,000
The rebate amount varies with your mortgage principal.
| Mortgage Amount | Bonus Amount |
| $150,000 to $299,999 | $500 |
| $300,000 to $499,999 | $950 |
| $500,000 to $749,999 | $1,500 |
| $750,000 to $999,999 | $2,500 |
| $1 million and over | $3,000 |
You will need a TD chequing or savings account to receive the cash bonus.
RBC Cash Back Mortgage
The RBC Cash Back Mortgage offers a lump sum advance of up to 7% of your mortgage, with a maximum of $20,000.
The cash back is paid on the date your mortgage is advanced.
The cash back levels below are based on a $100,000, $200,000 or $400,000 mortgage:
| Mortgage Amount | 4% Cash Back | 5% Cash Back | 7% Cash Back |
| $100,000 | $4,000 | $5,000 | $7,000 |
| $200,000 | $8,000 | $10,000 | $14,000 |
| $400,000 | $16,000 | $20,000 | $20,000 |
Learn more about RBC’s cash back program here.
BMO Mortgage Cash Back
Like TD, BMO does not offer a regular cash back mortgage.
Instead, you can take advantage of its occasional cash back offers when you open an eligible mortgage account.
The most current offer included up to a $3,300 bonus, however, it has expired.
Laurentian Bank Cash Back Mortgage
The cash back mortgage product from Laurentian Bank is up to 5% of your mortgage amount and a maximum of $25,000.
The mortgage must be a closed 5-year fixed rate term.
Scotiabank Cash Back Mortgage
Scotiabank’s cash back mortgage gives you up to 5% of your mortgage principal upfront.
It is available on 3, 4, 5, 7, and 10-year closed term mortgages.
National Bank Mortgage Cash Back
National Bank does not have a standard cash back mortgage. However, you can benefit from its promotional offers.
Offers: Get up to $3,000 on fixed or variable rate mortgages with a 4-year term or longer. This offer is available until October 31, 2022.
The bonus amounts vary with the size of your mortgage loan:
| Mortgage Amount | Bonus Amount |
| $100,000 to $249,999 | $1,000 |
| $250,000 to $499,999 | $1,500 |
| $500,000 to $749,999 | $2,500 |
| $750,000 and over | $3,000 |
Pros of Cash Back Mortgages
A cash back mortgage leaves you with extra cash you can spend on anything. With closing costs as high as 3% of your purchase price, this cash will come in handy.
Your prepayments for the mortgage and cash back are bundled into one monthly payment, so you don’t have to worry about managing several loans at the same time.
Cons of Cash Back Mortgages
The interest rate on a cash back mortgage is usually higher than a traditional mortgage. This means you will pay more in interest fees over the mortgage term.
If you break your mortgage early, the bank may require you to pay back a portion or all of the cash back to the lender.
| Lender | Mortgage Breaking Cash Back Penalty |
| Scotiabank | Full repayment |
| RBC | Pro-rated repayment |
| CIBC | Full repayment |
| National Bank | Pro-rated repayment |
Most cash back mortgage offers require you to have a mortgage term of 4 years or longer. Also, they usually apply to fixed-rate mortgages.
Is a Cash Back Mortgage Worth It?
If a bank is offering competitive mortgage rates that include a cash bonus offer, you could come out ahead easily.
For traditional cash back mortgages, the higher interest rate may end up costing you more than the cash back received.
That said, if you need a cash cushion to manage unexpected expenses after buying a home, a standard cash back mortgage may be useful.
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