Compare home loan cashback offers

Mortgage lenders offer cashback deals as incentives to attract new home loan customers. These deals typically range between $1,000 and $5,000, though some lenders offer more. 

Lenders often promote these deals as limited-time offers to encourage borrowers to choose them over others in a highly competitive mortgage market. This situation can be a win-win, provided the customer selects the right home loan for their situation. The lender gains a new customer, and the customer receives cash to help cover the cost of home loan fees and charges, conveyancing fees, or moving costs, relieving some of their budget pressure.

Cashback deals are most often offered to owner-occupiers and Australians who are refinancing their home loan, though a few cashback deals are available to first home buyers as well.

Cashback deals are most often offered to owner-occupiers and Australians who are refinancing their home loan, though a few cashback deals are available to first home buyers as well.

Cashback offers are almost always offered to new customers, rather than a bank or lender’s existing customers. You may be able to switch to another lender to benefit from a cashback deal, but you may not have the option to refinance with your current lender and receive cashback.

While every cashback deal is different, some features can be found shared amongst them, such as:

• A minimum loan amount – often $200,000 or more
• A minimum loan term
• A maximum loan to value ratio (LVR) – often 80% or less

Generally, the more cash you may be able to get back, the more specific the terms and conditions you may need to fulfil to qualify. Often the lower your LVR, the more cashback offers you may be eligible for.

Cashback home loan deals can help make up some of your upfront costs when applying for a home loan or refinancing, such as upfront and discharge fees.

A cashback deal may even help pay for additional home expenses, such as lenders mortgage insurance (LMI), stamp duty, hiring removalists or making renovations to the property. Cashback may also offer other benefits, depending on your personal financial situation and how you choose to spend the funds.

Benefits of cashback payments: 

• Pay for upfront costs
• Pay for stamp duty
• Pay for lenders mortgage insurance LMI)
• Pay for moving costs
• Pay for renovations

While having extra cash in your back pocket can be exciting, do your research and don’t choose your home loan based solely on a cashback offer.

There is more to a home loan than its perks. Said perks may include features like an offset account or redraw facility, or an introductory low interest rate that reverts to a higher ongoing rate after a year or two.

If a lender is offering a big cashback deal, but also charging a high ongoing variable rate or annual fee, the cashback deal may not provide as much value over the long term. A low-rate or low-fee home loan could prove less expensive, as the savings from refinancing to a low interest rate could equal or even exceed the value of a cashback offer in just a few years.

It may not be as easy to find cashback home loans to compare as it is with other home loan deals. Several major banks have been pulling their cashback deals from the market, due in part to record refinancing activity and increased competition between mortgage lenders. With fewer cashback home loan options to choose from, it may be harder to find a mortgage that also offers the right interest rate, fees, features, and benefits to suit your needs. 

If a cashback deal is a priority for your home loan, remember to also consider the interest rate and fees being charged when comparing your mortgage options. Use a Home Loan Repayment Calculator to calculate your potential payments (weekly, fortnightly or monthly) with different cashback home loans and discover which one may best suit your budget and financial situation.

Currently, the majority of home loan cashback offers are for refinancing purposes only. While there are still some available for first home buyers, refinancers are being offered the lion’s share.

This is because the home loan market has been coming out of a period of historically low interest rates. After 13 cash rate hikes since April 2022, home loan customers were refinancing at record levels to avoid rising interest rates and to reduce their home loan repayments. Mortgage lenders were offering refinancers competitive cashback deals to encourage these customers onto their books, though almost half have begun slashing or pulling the plug on these cashback deals.

Plus, the cost of refinancing can be a barrier for some home loan customers. The cost of break fees for fixed rate home loans, application fees with a new lender, and other expenses can climb into hundreds or even thousands of dollars. Offering a refinance cashback deal that may help cover these switching costs is one way lenders can compete for business from refinancers.  

Besides cashback, other special home loan deals selected lenders may offer owner-occupiers and investors include:

• Discounted interest rates
• Waived annual fees
• Waived LMI

Special offers like these may be especially appealing to first time buyers and younger Australians, who may be earning lower incomes or have less savings available than other buyers. Perks like these can help home buyers keep costs down after putting their savings into a home loan deposit, while investors may be able to offset some of their upfront expenses and maintain a higher rate of return.

Keep in mind that there is more to a home loan than the perks it offers. Home loans with bonus features may also have stricter eligibility criteria, or extra terms and conditions to fulfil, which may not suit every borrower. It’s worth comparing a range of home loan factors before signing on the dotted line. 

Use comparison tables

When searching for your first or next home loan, the comparison tables found on RateCity can help you compare the key factors of different mortgage options side by side (including cashbacks), so you can confidently compare apples with apples.

Check the interest rates

Carefully compare the interest rates of any home loans offering cashback deals to ensure the cashback value is not outweighed by the cost of higher interest charges. 

Look at the fees

Your home loan may charge upfront fees and ongoing fees as standard, and if you refinance from a fixed rate loan too early, you may also have to pay a break fee. It’s worth looking at a home loan’s comparison rate, which combines its interest charges and standard fees into a single percentage. While comparison rates are all based on a $150,000 principal and interest loan paid over 25 years for consistency, they may still help to indicate the loan’s ‘true’ overall cost, and how this may affect the cashback’s value. 

Consider the features

Lenders may offer some helpful home loan features, such as an offset account, a redraw facility or unlimited free additional repayments. If flexibility is important to you, it may be worth comparing home loans that offer these features as well as cashback.

Look at the lender

It's not enough to love the cashback you're being offered - you need to like the lender as well. Read reviews online and seek out word of mouth on their customer service, innovative fintech, and branch access, especially if you rely on face-to-face customer service. 

Calculate the value

Some mortgage lenders may charge  higher interest rates or fees for cashback loans than for more basic ‘no-frills’ home loan options. You may want to calculate whether the benefit of cashback outweighs any of these additional costs. A Home Loan Repayment Calculator could help you compare the cashback amount to the potential savings offered by a lower interest rate, and work out which option may offer you the most value.

Compare Real Time Ratings™

Finally, to help you narrow down your shortlist of options, you may want to look at each home loan product’s Real Time Ratings™ score. Real Time Ratings™ is RateCity’s rating system that ranks home loans out of five, based on their cost and flexibility. Unlike other comparison pages which rank their products once or twice a year, Real Time Ratings™ results are updated regularly to help them stay as accurate as possible.