Are you tempted to refinance in order to secure a cashback deal? You might have heard lenders offing between $1000 to $4000 cash in hand when they refinance through a particular lender. Is this offer as good as it sounds? Let’s explore your options.
What is a Refinance Cashback Deal & Offer?
This is when a bank or lender offers you rewards or cash to new customers. In some cases, the cashback can help pay for any refinancing costs that might be incurred. Other times you’re free to use the cash how you like.
Generally, cashback deals are not given to everyone, they are mostly suited to refinancers or those who have been paying off their mortgage for a few years, rather than first home buyers.
Why Do Lenders Give Away Cash?
Since interest rates have plummeted to new lows as a result of COVID-19 refinancers have been very active to secure lower interest rates.
According to the Australian Bureau of Statistics more than 200,000 people have switched lenders in 2020.
Due to this increase in customers looking to refinance home loan, it means more competition among lenders.
So, Should I Refinance for a Cashback Offer?
Generally speaking, a refinance cashback offer is a great incentive and perk especially to help with cash flow.
However, some lenders might be offering higher fees than others which might cancel out the cashback in the long run.
By speaking to your mortgage broker they will be able to provide you with this advice and assess it with your unique situation. For some, it could be a great win, for others there might be better options on the market, especially in today’s low interest rate environment.