While some borrowers start to tighten up and look for ways to save money, consolidate their home loans and protect their assets, other lenders are attempting to lure them in, or across, by offering incentives like juicy cash back deals. But borrowers beware, there can often be more catch than cash and it pays to look at the big picture so you don’t get caught out.

What is a home loan cash back?

A cash back offered by a lender, is a cash incentive paid to the customer upon the settlement of their home loan or refinance. Currently ranging from $1000 – $4000, the incentive could be in the form of cash paid into an account of your choice as a lump sum, deducted from home loan fees you might be liable for, or could also come in the form of gift cards, or pre loaded cash cards. 

While cashback offers are typically tied to refinances, some lenders also offer cashback for new home loans.

Why do lenders offer cash back home loans?

Cash back is one of the incentives home loan lenders might use to encourage borrowers to choose them in a competitive market. 

Sounds good right?

When does cash in your account not sound good? And often, there are no stipulations as to what you can do with the money. It’s yours to spend or save as you see fit. Some people use it to cover the associated purchase costs of their new home, or those of selling their previous property. It may also be handy to go towards and fees and charges that may have been incurred in the set up of the new home loan.

OK, OK so what’s the catch?

The thing about cash back deals, as with any sales incentive, is that it can be hard to gauge the overall value. We encourage you to consider the long-term cost of the home loan, as well as the interest rate, and any specific terms and conditions pertaining to the loan and then perhaps compare that with another “no frills” loan that isn’t offering a cash back deal.

How can I compare loans like this?

With great difficulty in many cases to be honest as you’re really never going to be comparing apples with apples. Given the sheer volume of different home loan products currently available, it’s best to chat to us about your unique set of circumstances so we can bring some options to you.

It’s really important to weigh it up and consider how much the home loan will cost you over the long run before you get too carried away with having an extra couple of grand in the bank.

Generally, the more features and benefits offered by a home loan, the more it may cost in fees and interest.

The bottom line is, you could potentially SAVE much more by sourcing the right home loan/ refinancing over the course of 2-3 years, so it really comes down to that old dilemma of delayed gratification. Can you wait and get more, or do you just want it now?

The choice is yours. We’re here to help. If you want to get a run-down of current cash back deals being offered by lenders then please give us a call.


All lending subject to status and lenders criteria. Terms & conditions apply. This document contains general information only. Your own personal circumstances have not been considered and you should seek independent financial advice prior to making any decision on a financial product.





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