Best home loan refinance cashback offers

Home loan cashback deals are incentives some lenders and banks offer on select products to attract new customers. These offers are typically only for refinance home loans (people who already have a loan and are switching to a new lender).

These promotional offers can range from $1,000 to $3,000 or more depending on the lender. Cashback deals are usually a lump sum deposited into your transaction account (after the new mortgage is settled), or can come as gift cards or rebates towards home loan fees.

While many banks have phased out refinance cashback offers because they were eroding profit margins and not encouraging customer loyalty, some lenders are still offering them.

Here are some key points about home loan cashback offers to consider before signing up.

Cashback offers are limited to specific borrowers

Cashback offers are usually available to eligible refinancers, including owner-occupier and investment loans. It's rare that lenders 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.

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.

There’s a minimum loan amount and loan-to-value ratio (LVR)

There are eligibility criteria for cashback offers, such as:

• the type of loan you apply for
• the minimum loan amount (usually $200,000 or more)
• the minimum loan term
• the loan-to-value ratio (this is your loan amount shown as a percentage of the value of your property). Most lenders require you to have less than 80% LVR; some may even do tiered cashback where the sign-up bonus amount is higher for borrowers with a bigger loan.

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.

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.

Terms and 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.