What is a refinance rebate?

Refinance rebates are cashback deals offered by lenders to attract new home loan customers. Lenders offer these deals to entice customers in a highly competitive mortgage market. 

Refinance rebates can give customers up to $2,000 to $5,000 (or more) cash in their pockets as cashback. This money can be used to offset the upfront costs of refinancing or for other purposes, such as paying for Lenders' Mortgage Insurance or funding a renovation project or whatever you choose. By offering these rebates, lenders benefit from gaining new business. At the same time, customers benefit from extra cash in their pockets, provided the new home loan’s terms are appropriate for their financial situation. 

It’s important to note that refinancing rebates are promotional schemes offered by lenders to attract new customers. They are often valid for limited periods of time and some banks are now dumping their cashback deals. Earlier this month, the CBA announced that it would no longer offer the $2,000 refinancing rebate from 1 June. NAB made a similar announcement, limiting the validity of its cashback offer to 30 June. So remember to check the validity of the offers advertised by lenders to make sure you receive the intended benefits when you sign up.

Most refinance rebates or cashback offers are between $2,000 to $5,000. However, some lenders may offer bigger incentives or additional rewards to gain new customers.

Apart from returning some cash into your pocket when you refinance, lenders may offer you credit card points, loan fee waivers and even free NBN to secure your business. However, remember that nothing comes for free in the world of debt and check all the terms and conditions of these offers. 

The real value of the rebate offered to you depends on several factors, including the size of the loan being refinanced and the specific terms and conditions of the offer. Therefore, it's essential to carefully review the terms and conditions and consider the overall cost of refinancing vis-à-vis the savings you hope to make to determine the actual value of the offer.

Cashback deals may seem tempting, but they can sometimes come at a cost. Before signing up for a refinancing rebate, compare other factors, including the interest rate on the loan, to ensure you get the best possible deal in the long run. 

Remember that refinance rebates, cashback, and other incentives are primarily marketing gimmicks designed by lenders to attract new business. It's essential to do the math and ensure you're getting a competitive deal rather than simply choosing a loan offer with the maximum rebate or cashback. Remember to look beyond the discount and compare home loan interest rates, fees and features to find the best possible loan for your needs.