diff --git a/examples/example.borg b/examples/example.borg
index b49598d0ab7f9a7bf3dc96cd36eb708412642eb6..4988e9cb61ea3faa97616c09502d44fed2a5a894 100644
--- a/examples/example.borg
+++ b/examples/example.borg
@@ -180,3 +180,9 @@ exclude = /var/lib/mysql
 ##
 ## Default:
 # passphrase =
+
+## Path to the directory that will hold borg's cache files. By default this is
+## empty, which will let borg use its default path of "~/.cache/borg".
+##
+## Default:
+# cache_directory =
diff --git a/handlers/borg.in b/handlers/borg.in
index df500a80bacb6daf26c61625d01eca6d558e27db..0ca5cb0c5fab20d16a07e78e6d43f7b0ed806f93 100644
--- a/handlers/borg.in
+++ b/handlers/borg.in
@@ -31,6 +31,7 @@ getconf create_options
 getconf prune yes
 getconf keep 30d
 getconf prune_options
+getconf cache_directory
 
 setsection dest
 getconf user
@@ -56,6 +57,20 @@ else
 fi
 execstr_archive="$archive"
 
+if [ -n "$cache_directory" ]; then
+   cache_parent_dir=$(dirname "$(readlink -f "$cache_directory")")
+   [ -d "$cache_parent_dir" ] || fatal "Cache directory parent dir '$cache_parent_dir' is absent or is not a directory."
+   BORG_CACHE_DIR=$cache_directory
+   export BORG_CACHE_DIR
+else
+   # Cache dir not set, let's clear out the environment variable to avoid
+   # having this directory be pointed to a random destination.
+   # Also apparently if we set the variable to an empty string, borg uses the
+   # empty string as though it was some path we specified and backup runs
+   # error out, so we need to unset the variable completely.
+   unset BORG_CACHE_DIR
+fi
+
 # check the connection at the source and destination
 [ -n "$test" ] || test=0
 if [ "$host" != "localhost" ] && ([ "$testconnect" = "yes" ] || [ "${test}" -eq 1 ]); then