Cashback offers for first-home buyers (July 2024)
Reduce Home Loans — $2,000 - $10,000 cashback
First-home buyers who qualify can receive up to $2,000 - $10,000 cashback with a Reduce Home Loan. The cashback amount is based on your home loan amount:
- $250,000 - $499,999: $2,000
- $500,000 - $749,999: $3,000
- $750,000 - $1,999,999: $5,000
- $2,000,000+: $10,000
Available for home loans with a maximum 90% LVR. Cashback is paid within 30 days of settlement. For loans funded by July 31st. Offer available on a per-application basis.
You must keep the loan for at least 24 months after settlement, otherwise the cashback amount will need to be repaid. It will be added to the total balance payable upon discharge or refinancing.
ANZ First Home Buyer Bonus — $3,000 cashback
Eligible first-home buyers can get $3,000 cashback with an ANZ home loan of $250,000 or more. You must have an ANZ Access Advantage, ANZ Plus or ANZ One offset account at loan drawdown (which must occur within 180 days of applying). Bonus is paid after settlement.
$1 LMI offer replaced with First Home Guarantee Scheme
Westpac subsidiaries such as St George, BankSA, and Bank of Melbourne previously reduced LMI to $1 for eligible first-home buyers with a minimum 15% deposit. They’ve discontinued these offers after becoming participating lenders in the First Home Guarantee Scheme. This national program supports eligible first-home buyers to buy a home with a deposit starting from 5%.
Suncorp Better Together Special - 6.14% p.a. discounted rate
Suncorp is offering a discount variable rate of 6.14% p.a. (comparison rate 6.15% p.a.) for new owner-occupied loans taken out as part of the Better Together Special Offer. It represents a 2.51% discount on the Standard Back to Basics variable (currently 8.65% p.a.).
This offer applies to new loans above $150,000, with a maximum 80% LVR.
What you need to know about refinance home loan cashback offers
Home loan cashback deals are incentives some lenders and banks offer on select products to attract new customers. Currently, the majority of home loan cashback offers are for refinance home loans (people who already have a loan and are switching to a new lender), although some lenders extend those offers to first-home buyers.
Cashbacks generally range from $1,000 to $3,000 or more depending on the lender and your loan amount (e.g. Reduce Home Loans offers up to $10,000 for loans above $2 million). Cashback deals are usually a lump sum deposited into your transaction account (after the new mortgage is settled), or can come as rebates towards home loan fees.
While many banks have discontinued refinance cashback offers because they were eroding profit margins and discouraging customer loyalty, some lenders continue to offer them.
Here are some key points about home loan cashback offers to consider before signing up.
1. Cashback offers are limited to specific borrowers
Cashback offers are usually available to eligible refinancers, including owner-occupier and investment loans. But, select lenders also offer cashback on loans for first-home buyers. Some deals may also only apply to particular loan products like variable rate home loans or package loans.
2. Cashback deals are for new customers only
Lenders usually make it so only new customers can get the cashback. So, if you’re refinancing a loan with the same lender (or even within the same network of lenders), you might not get any cashback.
3. There’s a minimum loan amount & loan-to-value ratio (LVR)
There are eligibility criteria for cashback offers, such as:
a) the type of loan you apply for (e.g. some lenders may only offer cashbacks on owner-occupier loans, while others may offer them on investor loans too) b) a minimum loan amount (usually $250,000 or more) c) a minimum loan term d) Most lenders require an LVR below 80% (your loan amount as a percentage of your property's value). Some may even offer tiered cashback where the sign-up bonus amount is higher for borrowers with a bigger loan.
4. Cashback offers have an expiry date
Cashback offers usually come with an expiration date. Generally, the home loan must be finalised (settled) by the lender’s specified deadline to qualify for the benefit — usually within 120 days of applying.
5. You can use the cashback for any purpose
In many cases, once the lender has paid out the cashback, it’s up to you how you want to spend it. This means you could use the funds to cover moving costs if you’re refinancing as part of a move, to renovate your home, or simply to save on interest by making a one-off lump sum repayment on your home loan or stash it in your offset account.
6. Terms & conditions apply
Watch out for any other small print in the cashback offer. This might include requirements like remaining with the lender for a specified period of time after receiving the cashback or having to open a linked transaction account to be eligible.
Other types of home loan refinance offers
Cashbacks aren’t the only refinance deals available. Here are other offers some lenders may advertise to eligible refinancers and other borrowers.
Reward point offers
This kind of perk is more commonly associated with rewards credit cards, but a relatively new innovation in the home loan market is lenders offering points to customers who sign up. Some lenders that offer home loan perks and rewards include Qantas Money, Virgin Money and Qudos Bank, just to name a few.
Discounted interest rates
With some lenders, a discounted interest rate is the carrot being dangled in front of refinancers. The catch is generally that the lower rate is for a limited period only. Some providers offer refinancers an ongoing discount that applies progressively as you pay off the loan (i.e. every year you get a small discount on your interest rate). Unloan (a digital only lender backed by CommBank) and Athena Home Loans are among the Australian lenders with this kind of offer.
Waived home loan fees
Additionally, there are lenders in the market who will genuinely waive all fees on select home loans products to attract new customers. These are usually online lenders such as Unloan and Athena Home Loans who advertise no application fees, no ongoing fees and no discharge fees. Based on analysis by Money.com.au, a borrower could save up to $15,000 on a 30-year mortgage if all fees (including annual package fees) were waived.
LMI waiver for professionals
Some banks and lenders have an LMI waiver for professionals in certain secure or high-paying industries. This typically includes legal and healthcare practitioners, finance and accounting professionals, etc. You may have to be a member of your industry's peak body or authority (e.g. Australian Medical Association) to apply. ANZ, NAB, and Westpac are among the lenders that offer an LMI waiver for professionals.
Is a cashback deal on a home loan better than refinancing to a low rate?
In almost any case, a lower rate will save you more over the life of your loan than a one-time benefit like cashback, according to our home loans expert.
Mansour Soltani, Money's Home Loans Expert
“Compare the monthly repayments between the cashback lender and a lender offering a more competitive rate but without cashback. Consider how many years it would take to offset the cash bonus. If it's under 2-3 years, the lower rate is always a better option.”
Mansour Soltani, Money's Home Loans Expert
Cashback deal vs lower rate refinance comparison
Loan amount | |
Refinancing with no cashback and a lower rate | $800,000 |
Refinancing with cashback and a higher rate | $800,000 |
Interest rate | |
Refinancing with no cashback and a lower rate | 6.00% |
Refinancing with cashback and a higher rate | 6.25% |
Cashback | |
Refinancing with no cashback and a lower rate | No cashback |
Refinancing with cashback and a higher rate | $2,000 cashback |
Loan term | |
Refinancing with no cashback and a lower rate | 25 years |
Refinancing with cashback and a higher rate | 25 years |
Monthly repayments | |
Refinancing with no cashback and a lower rate | $5,154 |
Refinancing with cashback and a higher rate | $5,277 ($123+ in monthly repayments) |
Establishment fee | |
Refinancing with no cashback and a lower rate | $350 |
Refinancing with cashback and a higher rate | $350 |
Discharge fee | |
Refinancing with no cashback and a lower rate | $395 |
Refinancing with cashback and a higher rate | $395 |
Months it would take to offset cashback | |
Refinancing with no cashback and a lower rate | Nil |
Refinancing with cashback and a higher rate | 10 months |
| Refinancing with no cashback and a lower rate | Refinancing with cashback and a higher rate | |
|---|---|---|
Loan amount | $800,000 | $800,000 |
Interest rate | 6.00% | 6.25% |
Cashback | No cashback | $2,000 cashback |
Loan term | 25 years | 25 years |
Monthly repayments | $5,154 | $5,277 ($123+ in monthly repayments) |
Establishment fee | $350 | $350 |
Discharge fee | $395 | $395 |
Months it would take to offset cashback | Nil | 10 months |
Pros & cons of home loan refinance cashback offers
Pros
- Provide upfront savings to refinancers and can pay for switching costs
- Funds/perks can be spent on virtually anything
- Can incentivise borrowers to shop around for a better rate
Cons
- Cashback home loans may have uncompetitive rates and fees
- Strict eligibility criteria apply (not all borrowers qualify)
- Only available from select lenders and not always on the most competitive products
Are home loan refinance cashback offers worth it?
Cashback deals can be an attractive option for refinancers to offset the costs of refinancing, but can end up costing you more in the long term if you set and forget your home loan. Cashback incentives encourage you to sign up for a loan for the upfront benefit, but it’s often less competitive than what you could get elsewhere.
It's important to consider your loan's long-term value and the interest rate, fees and loan features combined. A higher interest rate, for example, will likely cancel out the cashback before long, sometimes within just a few months. A slightly lower interest rate might save you more money over the life of the loan compared to a one-time cashback offer.
Home loan cashback deals: What to watch out for
Here’s what to think about when considering any cashback offer:
- Is the interest rate on the cashback home loan more competitive than the rate on your current loan?
- What fees are involved (e.g. discharge fees, application fee for the new loan)? Make sure the fees and charges to set up the loan don’t eat away at most of the cashback.
- Does the cashback home loan come with the right features (e.g. offset and redraw) and is it structured to suit your financial situation and goals? For example, fixed-rate home loans tend to come with fewer features and restrictions on making additional repayments compared to variable rate home loans which are more flexible.
- Can you negotiate a lower interest rate or better loan terms with your existing lender without switching? If you're currently paying more than the average mortgage interest rate, your lender should be able to offer you a discount.
- Do you have at least 20% equity in your home? If not, you may not qualify for a cashback. Consider that if your LVR was above 80%, you’d likely be charged lender's mortgage insurance (LMI) again when refinancing which would negate any savings from the cashback.
Use our home loan calculator to estimate your mortgage repayments.
How to apply for a cashback home loan
1
Find a good cashback deal
Finding the best cashback offer you qualify for is the first step. Use comparison tables for a side-by-side view of the best deals in the market or ask your mortgage broker to source some offers you qualify for. Ensure that the interest rate on the new loan is in line with other lenders not offering cashbacks. You may have some wiggle room to negotiate a lower interest rate, depending on the lender.
2
Request a mortgage discharge form (if you’re refinancing)
If you’re refinancing, you must request a mortgage discharge form from your current lender. This is used to release the security (the property) backing the home loan. After you request a discharge form, you will typically get a call from your lender's retention team. According to Mansour, if you have a competitive interest rate offer from another lender, they will usually match it to keep your business. If you’re a first-home buyer, you’ll skip this step.
3
Apply for the cashback loan
You can apply for a cashback home loan online via the lender’s website (it can take up to 20 minutes). Most banks and lenders will get you to verify your ID and sign all relevant documents online. Alternatively, a lending specialist will be touch to discuss your application in detail and ensure you qualify for the home loan product (and cashback). If you’re using a mortgage broker, they’ll handle the application process on your behalf from start to finish. In either case, you’ll be asked to submit your financial paperwork — usually two current payslips, three months of bank statements and a notice of assessment from the ATO.
4
Get your cashback
If you’re approved, the cashback will be paid into the transaction account linked to your new home loan within 30-60 days of settlement (depending on the lender). Some lenders may credit the cashback to any nominated transaction account with another bank, provided the account is in the same name(s) as the loan that qualified for the cashback offer.
