Home Loan Cashback Offers For Refinancers (Up to $10k)

Lender	Cashback offer	Notable conditions
ANZ	Up to $2,000 for eligible external refinancers; and $3,000 for eligible first home buyers	Eligible owner-occupied and investment home loans $250k min loan amount Max LVR: 80% Cashback for first home buyers: Drawdown must occur within 180 days of applying
Credit Union SA	Up to $2,000	Eligible owner-occupied and investment home loans $300k min loan amount Max LVR: 80% Current or retired employee of the South Australian Education Community, students carrying out studies in education, or their eligible immediate family member
Greater Bank	$2,000 for loans between $250k - $500k; and $2,500 for loans above $500k	Eligible owner-occupied and investment home loans $250k min loan amount Max LVR: 80%
IMB Bank	$2,000 for loans between $350k - $700k; $3,000 for loans between $700k - $1M; and $4,000 for loans above $1M	Eligible owner-occupied and investment home loans $350k min loan amount Max LVR: 80% Must settle within 90 days
ME Bank	Up to $3,000 for loans above $700k	Eligible owner-occupied and investment home loans $700k min loan amount Max LVR: 80% Apply from 08/09/2023 and settle within 120 days
Newcastle Permanent	$2,000 for loans between $250k - $500k; and $3,000 for loans above $500k	Eligible owner-occupied home loans $250k min loan amount Max LVR: 80%
Reduce Home Loans	$2,000 for loans between $250k - $500k; $3,000 for loans between $500k - $750k; $5,000 for loans between $750k - $2M; and $10,000 for loans above $2M	Eligible owner-occupied and investment home loans $250k min loan amount Max LVR: 80% (70% for higher loan amounts)

What are home loan cashback offers?

A home loan cashback offer is a financial incentive provided by banks to attract new borrowers. It’s a lump sum of money given to you either upon settlement or shortly after your loan is approved. Depending on the lender and loan amount, cashbacks can range from $1,000 to $10,000.

This offer usually comes as a direct cash payment made into your bank account. The goal of a cashback offer is to make the loan more appealing by reducing your upfront costs or boosting your savings. These deals are often available for a limited time, which creates a sense of urgency among borrowers.

While it can provide an immediate financial sugar-hit, it’s important to look beyond the cashback itself. You’ll need to check the interest and comparison rates, fees, and other criteria to ensure it’s a good deal.

Tip: A skilled mortgage broker can help you decide if a cashback offer is worth it. They’ll compare a range of products and tell you if the deal is good or if you’d be better off with a low interest rate (more on this below).

How do cashbacks work and how can you qualify?

Cashbacks are usually paid as a lump sum into the transaction account linked to your new mortgage, typically within 30-60 days after settlement.

To qualify, you generally need to meet certain conditions, such as:

Loan amount

There’s often a minimum loan amount required for cashback offers. For example, you might get up to $2,500 cashback for a loan between $250,000 and $500,000, or $10,000 cashback for a loan over $2 million.

Limited time

Cashback offers can be short-term, so you usually need to apply and settle the loan before a certain date.

Borrower type

You might need to be a specific type of borrower, most commonly someone refinancing from another bank.

Linked account

You often need to open a transaction or savings account with the same lender to receive the cashback.

1

Designed for new customers

Most cashbacks are aimed at new customers who are either buying their first or next home, or are refinancing from another bank. It’s a bit like a welcome gift from the new lender to sweeten the deal. So, if you’re refinancing your home loan with the same lender, chances are you won’t receive any cashback.

2

Minimum loan-to-value ratio (LVR)

Banks often require a loan-to-value ratio (LVR) below 80% for cashback offers. The LVR is the amount of your loan compared to the property’s value. To qualify for a cashback deal, you’ll often need to put down at least 20% of the property’s value as a deposit. A lower LVR means you’re borrowing less relative to the property’s value, which reduces the risk for lenders if property prices drop or if you face financial trouble.

3

Strict terms and conditions

Home loan cashback offers come with stricter terms and conditions to protect the lender’s interests and ensure that the offer is used as intended. For example, you might need to stay with the lender for a certain number of years after receiving the cashback. This helps the lender make sure they don’t lose money if you switch to another provider soon after getting the cash. This criteria ensures you remain a customer for a longer period, which helps the bank recoup the costs associated with providing the cashback.

Cashback offer vs lower rate: Which is a better deal?

In most cases, a lower interest rate on a home loan is a better option than a cashback offer. A lower rate reduces your monthly repayments and the total amount you pay over the life of the loan. Although cashback might give you a cash injection upfront, it’s usually a one-time benefit.

When comparing options, look at your monthly repayments for both offers. With a lower rate, you’ll likely save more money each month compared to getting cashback. Over time, these savings add up. If it takes you less than two to three years to use up the cashback value, the lower interest rate will almost always save you more in the long run.

A quick comparison

Imagine you’re refinancing and you’ve narrowed your search down to two mortgages for a $600,000 loan over 20 years. The first option has a lower interest rate of 5.99% p.a. Over the life of the loan, this home loan would result in a total interest cost of $430,829.

The second option is a cashback offer of $2,500, but the interest rate is 6.25% p.a. With this rate, you would end up paying $452,536 in interest over the same 20-year period. After taking away the cashback, your net cost would be $450,036.

Even though you get $2,500 upfront with the cashback offer, the higher interest rate means you end up paying $19,207 more in interest over 20 years. In this example, the first option with a lower interest rate is the better choice for saving money in the long run. This scenario also doesn’t factor in any discharge or establishment fees, as well as other costs that may apply when switching loans.

Cashback offer pros and cons

Pros

Provides money upfront, which can help cover refinancing costs or increase savings

Can normally be used however you like - whether it’s for home improvements, paying off debt, or adding to your savings

Motivates you to explore different lenders and potentially find better overall loan conditions

Cons

Sometimes come with higher interest rates or additional fees, which can outweigh the initial benefit of the cashback

Not everyone qualifies as lenders may have specific criteria that limit who can take advantage of these deals

It’s a one-time benefit and cashback offers are not available from all lenders, nor are they usually offered on the most competitive loan products

What to ask your broker when comparing cashback offers

Although most brokers will know which cashback offers are suited to your circumstances, there are some important questions you should ask.

Is the interest rate competitive? First, check if the rate on the cashback loan is competitive compared to your current rate or the rates offered by other lenders. The cashback alone doesn’t guarantee a better deal if the interest rate is higher than what you’re currently paying. Ask your broker to explain whether the savings from a lower rate outweigh the benefits of the cashback.
Are there any mortgage fees? Consider all associated costs with switching loans, including fees for ending your existing mortgage and setting up a new one. These fees can quickly diminish or even exceed the cashback amount. Ensure that the cashback effectively offsets these costs and still provides you with a financial advantage.
What features does the home loan cashback offer have? Your broker should assess the features of the new loan beyond the cashback offer. Important features like an offset account or redraw facility can impact your overall savings. A cashback offer should not be the sole benefit.
Am I better off negotiating with my current lender? Before committing to a new loan, explore whether your current bank can offer you a better rate or terms without the need to switch. If you’ve decided to refinance to a new lender, your broker can negotiate a better deal on your behalf.

To apply for a home loan cashback offer, start by reviewing your current financial situation and determining if a cashback deal suits your needs (i.e. you need immediate access to the cashback funds). From here, you’ll typically follow these steps:

1

Contact a mortgage broker to explore your cashback options and run through the fine print, including the terms and eligibility criteria. With your broker’s help, submit your loan application or request a mortgage discharge form if you’re refinancing.

2

Carefully review and sign the loan agreement, then work with your broker to finalise the switch from your existing loan. Your mortgage broker will handle most of the paperwork, including the back-and-forth between lenders, but they may ask you to provide any necessary documentation.

3

Once the new loan is settled, the cashback amount will be credited to your linked transaction account. This usually takes place 30-60 days after settlement.

4

Finally, your broker will keep an eye on your new loan and check in with you to see how everything is going. After 12-24 months, they’ll also let you know if there are better deals available in the market and offer any additional help you might need.