Commonwealth Bank, Westpac, ANZ and NAB are offering cashback deals of up to $4,000 to attract new customers, as refinancing hits a record high.
Westpac has just increased its cashback offer from $2,000 to $3,500 for home loan refinancers. Meanwhile, Commonwealth Bank and NAB are offering $2,000 cashback deals for refinancers.
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According to RateCity analysis, there are currently 33 lenders on the market offering cashback deals and the majority of these are for refinancers only.
The highest cashback on offer for a $500,000 mortgage is currently $4,000 and this is offered by 12 lenders, including ANZ. Some lenders may offer bigger deals for larger loan sizes.
While the cash being offered would be welcomed by many Aussie households feeling the pinch, RateCity research director Sally Tindall warned borrowers to “do the maths” and read the fine print before taking up any deal.
“An offer of cold hard cash at a time when your budget is buckling under pressure can be hugely tempting but, remember, these deals are marketing plays so make sure you’re coming out on top,” Tindall said.
“A competitive interest rate typically trumps a one-off perk, particularly on larger loans and almost certainly in the longer term. That said, savvy refinancers who drive a hard bargain on rate and commit to switching lenders regularly can potentially come out ahead using these deals.”
But if you’re likely to “set and forget” your home loan, Tindall said you’d be better off looking for a longer-term deal rather than a one-off cash boost.
Refinancing is currently at a record high, as the Reserve Bank continues to hike interest rates. The latest ABS lending indicators show a total of $19.5 billion worth of loans iwere refinanced in the month of November.
The Reserve Bank is widely expected to increase interest rates when it meets on Tuesday, with most economists tipping a 0.25 per cent hike.