As the RBA cash rate came crashing down to 0.10% in November 2020, a number of lenders needed to do more than a cheap rate to stand out in a rapidly-growing mortgage and refinance market. Enter: cashback offers.
At one stage more than 30 banks and lenders offered some form of cashback. However with interest rate rises starting in May 2022, the bulk of these providers have withdrawn their offers. For example, Westpac, NAB, and CommBank withdrew theirs as the 2023 financial year drew to a close.
ANZ, however, is the only major bank still holding out at the time of writing, with no explicit sunset date on its $2,000 cashback for eligible refinances. A number of other lenders also offer cashbacks to varying degrees, including loans.com.au, Reduce Home Loans, and Bank of Queensland.
Below are some banks and lenders that offer cashback deals and other incentives.
Compare home loan cashback offers
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $2,408 | Principal & Interest | Variable | $0 | $530 | 70% | Featured Online ExclusiveUP TO $4K CASHBACK |
| |||||||||
6.29% p.a. | 6.35% p.a. | $2,473 | Principal & Interest | Fixed | $0 | $440 | 80% |
Lenders with cashbacks
According to InfoChoice's database and research, 11 individual institutions have some form of cashback offer.
- loans.com.au
- ANZ
- BankSA
- St George
- RAMS
- Bank of Queensland
- ME Bank
- Newcastle Permanent
- Reduce Home Loans
- Greater Bank
- IMB
IMB came back to the fray with a new offer in March 2024. Between December 2023 and January 2024, RACQ Bank, and The Mutual Bank withdrew their cashback offers. Interestingly, Bank of Melbourne withdrew its cashback offer despite Westpac Group compatriots BankSA, RAMS and St George still offering theirs.
As cashback offers are popularly offered to refinancers, you will have to double check if the offer precludes refinances within the same banking group. For example, RAMS, BankSA and St George are part of the same Westpac group; Greater Bank and Newcastle Permanent merged in March 2023; and ME Bank is also part of the Bank of Queensland group.
Is it for new lending or refinances only?
If you’re applying for a totally new home loan, you’ll want to double check the offer you’re eyeing-off isn’t for refinances only. Restricting the cashback offer to refinances is a relatively low-risk ploy from a lender to take marketshare from a competitor and get a borrower on its books with a demonstrated history of repaying a home loan.
If you are refinancing a home loan for a cashback offer, keep in mind quite a few lenders preclude the offer if you’re refinancing from the same brand. This includes subsidiaries. For example, if Westpac had a cashback offer, it might exclude refinances from subsidiaries such as RAMS, St George, Bank of Melbourne, and BankSA.
If you’re refinancing, you’ll also want to take into account the typical costs of refinancing. This varies from lender to lender, but experts say the average is about $1,000, which includes valuation fees and various other admin costs. If you’re determined to make the most of your cashback, consider the costs first and look at a lender that minimises them.
Check the minimum loan size
Many lenders restrict eligibility to minimum loan sizes, ranging anywhere from $150,000 to more than $400,000. Generally speaking the biggest cashback offers go to bigger mortgages, sometimes requiring more than $1 million.
This might be to eliminate those heading towards the end of their mortgage from getting cashback, or those who are potentially in a position to pay it off in huge chunks.
How and when is the cashback paid?
Lenders might be reluctant to transfer you the cashback as cash into your bank account. They might offer to reduce the mortgage by that amount, offer it as gift cards, or some other form of renumeration.
Further, you might be waiting a while to see the cash. Some lenders make you wait 90 days after settlement until you actually see it, while others are a bit more quick on the draw. You will have to consult the terms and conditions or ask your lender directly as to how and when it’s paid.
Prioritise the basics: Interest rates, fees, and flexibility
While cashback can be an enticing offer, you still have to consider a mortgage’s ‘bread and butter’ such as interest rates, fees, and flexibility.
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Interest rates: You’ll want to make sure you’re getting a competitive interest rate, as you will start to lose the benefit of the cashback in the first place if you are paying overs for an uncompetitive product.
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Fees: Fees can be reflected in the comparison rate; a high comparison rate relative to the advertised rate usually means high fees. It’s no use getting a cashback only for it to be effectively gobbled up in fees when you start a new loan or refinance.
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Flexibility: Cashback can go a long way in helping your budget and bottom line in the short term, however, you’ll want to make sure the home loan still retains flexible features such as extra repayments and free redraws. Further, some cashback offers may be attached to fixed-rate products, which are hard and costly to switch away from.
Other deals on offer
While they may not be cashback, a few lenders have these longstanding offers on the table:
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St George Bank $1 LMI: First home buyers pay only $1 in lenders mortgage insurance. Maximum loan values apply, minimum deposit 15%.
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Suncorp Better Together: Combine home loan with eligible savings account and get an interest rate discount.
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Westpac LMI Waiver: LMI waived if certain healthcare professionals have at least a 10% deposit.
As always check the specific product for eligibility criteria.
Photo by Sandy Millar on Unsplash
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