Cashback and other offers for first-home buyers
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. Available upon individual application.
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.
Suncorp — LMI waiver for eligible medical professionals
Available if at least one borrower is an eligible Medical Practitioner (registered with AHPRA) at time of the loan application. The loan amount must be between $250,000 and $1,500,000, with principal and interest repayments and a loan-to-value ratio (LVR) between 80.01% and 90%.
Offer applies to residential property for owner occupied or investor purpose. Pre-approvals, bridging loans, construction loans and refinances of an existing Suncorp Bank home loans are not eligible.
Westpac - LMI waiver for healthcare and emergency services workers
Eligible borrowers in selected medical, healthcare and emergency services professions could get a home loan with a 10% deposit, without paying lenders mortgage insurance. Minimum income threshold applies, as well as other terms and conditions.
What you need to know about 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.
Are home loan refinance cashback offers worth it?
Cashback deals can be an attractive option for borrowers to offset the costs of refinancing. But they 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 the loan may be less competitive than what you could get elsewhere.
It's important to consider your loan's long-term value, based on 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.
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 probably 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 | $0 |
Refinancing with cashback and a higher rate | $2,000 |
Monthly repayments | |
Refinancing with no cashback and a lower rate | $5,154 |
Refinancing with cashback and a higher rate | $5,277 (+$123) |
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 |
Time it would take for interest savings to cancel out cashback | |
Refinancing with no cashback and a lower rate | 10 months |
Refinancing with cashback and a higher rate |
| 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 | $0 | $2,000 |
Monthly repayments | $5,154 | $5,277 (+$123) |
Establishment fee | $350 | $350 |
Discharge fee | $395 | $395 |
Time it would take for interest savings to cancel out cashback | 10 months |
Cashback offer checklist: Do you qualify?
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)
Cashback offers come with specific eligibility criteria, such as the type of loan (e.g. some lenders only offer cashbacks on owner-occupier loans, while others may extend them to investor loans as well). Typically, there’s a minimum loan amount, often $250,000 or more, and a minimum loan term. Many lenders also require a loan-to-value ratio (LVR) below 80%. Some even offer tiered cashback incentives, with higher bonuses for borrowers who take out larger loans.
4
Some cashback offers have an expiry date
Some cashback offers come with an expiration date. Generally, the home loan must be finalised (settled) by the lender’s specified deadline to qualify for the benefit. Alternatively, the offer may be open-ended but your loan must settle within a certain number of days of you applying.
5
Is the lender open to borrowers like you?
You might qualify for the cashback offer based on the loan amount you're refinancing, but remember some niche lenders are not open to all borrowers. Examples include regional banks and credit unions, or industry-specific providers. Credit UnionSA's cashback offer is only available to people linked to the education profession in South Australia, for example.
6
Other 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.
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.
Other types of home loan refinance offers
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 (e.g. Qantas Money and Qudos Bank) offering reward points to customers who sign up. If you're considering this kind of offer, it's worth checking what the points would be worth when converted to gift cards. That will give you a rough idea of the offer's value compared to getting cashback.
Discounted interest rates
Discounted home loan interest rates are another carrot being sometimes 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 an additional discount on your rate). Unloan (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.
Pros & cons of home loan refinance cashback offers
Pros
- Provide upfront cash injection for refinancers and can help cover switching costs
- The money can be spent on virtually anything
- Can incentivise borrowers to shop around for a better rate
Cons
- Cashback home loans may have less competitive rates and fees
- Only offered by a handful of lenders, limiting your choice
- Strict eligibility criteria apply (not all borrowers qualify)
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.
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.
