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How to get a home loan refinance cashback deal in 2021

If you’re in the market for a new home loan you’ve probably heard about cashback deals. Whether you’re purchasing a new property, or refinancing an existing home loan, it’s important to find the best deal possible.

Sometimes, a great home loan deal might include a cashback offer, but it probably shouldn’t be your priority. In this article we’ll explain what home loan cash deals are, how you can qualify and whether they’re worth it.

What are home loan cashback deals?

Home loan cashback is a deal offered by banks and lenders to attract more customers. Typically, a lender will promise a certain amount of cash back if you take out a home loan with them. As an alternative to receiving this in cash, some lenders offer to cut the fees you would normally be charged.

Cashback is part of a range of incentives lenders use to encourage borrowers to choose them in a competitive market.

How much cashback could I get?

The amount of cash you could get back will depend on the lender. These days, it’s common to get back between $1,000 and $4,000 in cash.

Why are lenders offering home loan cashback deals?

When the Reserve Bank of Australia (RBA) lowered the cash rate, most lenders followed suit and lowered interest rates for their customers. This, paired with there being more lenders than ever, has made the mortgage market very competitive.

In order to stand out from the crowd and gain customers, many lenders are extending offers to new customers, such as cashback deals, gift vouchers and zero fee home loans. They are particularly common in 2021 with banks wanting to provide customers with a little more confidence in the COVID-19 recovery period.

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How can I qualify for a cashback deal?

Most lenders require you to meet certain criteria in order to be eligible for a cashback deal. These generally include:

  • Be a new customer with the lender
  • Have less than 80% LVR (i.e. minimum 20% deposit for new buyers or 20% equity for those refinancing)
  • Your loan is covering an owner occupied property
  • Certain minimum loan amounts (e.g. minimum $250,000 mortgage)

Every lender will have slightly different terms with regard to their cashback deals, so it’s important to check for individual requirements. Some cashback schemes are exclusively for first home buyers, while others are targeted towards those refinancing and switching to a new lender.

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Are cashback deals worth it?

Home loan cashback deals can be very attractive to borrowers looking to maximise their cash flow. However, remember to consider the home loan as a whole product, rather than just a mortgage with a bonus.

Remember to consider the other aspects of the home loan, including:

  • Interest rate
  • Loan fees (upfront and ongoing)
  • Loan features
  • Loan repayment term
  • The quality of the lender’s customer service

A cashback bonus might not be all that appealing in the long run if your interest rate is higher than the standard. Luckily, if you end up with a poor interest rate, you can usually refinance with ease unless you’re locked into a fixed term loan.

Take the time to compare different home loans before committing to one just because it has a great sign-on offer. There are a lot of different lenders out there, so it’s smart to consider a different lender than you would normally go with. For example, if you typically stick with a major bank for all financial services, you might want to see if you can get a better deal with an emerging, online lender.

Sometimes the best home loan for you simply won’t have any unique sign up deals — it could just be a solid low interest home loan with a lender you trust.

Which banks and lenders offer cashback deals?

Cashback deals and other home loan incentives change every month. It’s a good idea to speak to your mortgage broker or a Home Loan Specialist to find out what deals are out there and whether you qualify.

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Home loan offers for new home buyers

Most cashback deals are targeted to borrowers refinancing an existing home loan and few are available for new home buyers. Deals change month to month, so you can sometimes find cashback deals that new home buyers are eligible for.

New home buyers should look for other offers. These may include:

  • Honeymoon rate offers (e.g. short term interest rate discounts)
  • Credit card offers (e.g. 0% interest for a period of time)
  • Low fee or no fee home loans

Got a home loan question? Just ask!

We're here to help. Get free expert advice at a time that suits you. Choose a time to chat with a Home Loan Specialist here

The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

Tags: interest rate, home loan, refinance, lender, cash rate, loan offer

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 35% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors.
*WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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