Chase is offering to give customers 1% of their scheduled monthly principal and interest mortgage payments back if they meet certain requirements via its new “1% Mortgage Cash Back” program.
The bank will pay customers 1% of their total annual mortgage payments on each anniversary of the loan’s origination so long as payments are made automatically and in full from a Chase checking account.
The annual payment can be applied to pay down mortgage principal or customers may elect to receive a cash payment deposited into their checking account.
“We talked to many customers and prospects, and they really liked the idea of having their bank help them pay down their mortgage,” said David Lowman, Chief Executive Officer of Chase Home Lending, in a press release. “They also liked the option of getting the reward in cash.”
On a 30-year fixed mortgage with a $210,000 loan amount and a six percent interest rate, a customer would save nearly $12,000 (in cash back and interest payment reduction) and pay their mortgage off nine months early.
While it seems like a pretty good deal, other banks typically offer customers an interest rate discount upon loan origination if the borrower is an existing customer using automatic billpay.
For instance, another leading bank may reduce the actual mortgage rate you receive by .25%, so the actual savings would likely be greater than the 1% cash back offered by Chase.
It’s unclear if existing Chase mortgage holders and checking account customers can take advantage of this offer.