Can you still get cashback for switching your home loan?
Yep, you could get up to $4,000 cash – simply for filling out a few forms and handing over some recent payslips.
Okay, so refinancing your home loan may have a few more steps to it. But the process of showing evidence of your spending and your income only adds up to a few hours of life admin and correspondence, and it's the ROI you'll ever get.
In case you don't know what a cashback loan is, it's when a bank or lender offers you a cash bonus if you refinance your home loan to them.
They offer the cash as an incentive to get your business, and the money…
- Has no strings attached. You can spend it however you like: to make mortgage payments, to spend on a holiday, to save for a rainy day… the choice is yours.
- Is deposited into your account once the loan settles – usually within 30 days.
- Doesn't attract a single cent of tax. You don't pay any tax on it, because it's not treated as "income" by the ATO.
How easy is it to get a cashback loan?
Cashback home loans are normal home loans with a normal application process and loan criteria. These offers are nothing new. I've had a mortgage or mortgages for over 20 years and in that time, I've taken out a loan or refinanced over a dozen times. And at least half of those times, I've received cashback.
Once, I even got one when the bank wasn't advertising a cashback! I experienced poor service and complained, and they offered me $2,000 to continue my refinance with them, rather than going elsewhere.
Back in January, a report in The Age suggested they were going to be hard to get.
Mortgage cashbacks are gone, the article warned, "and they're not coming back".
Thankfully, that's not true. But the state of play is a little different now.
There are fewer offers available. Over the last couple of years, crazy high competition and lending activity meant that lenders were madly vying for new business, and they weren't afraid to throw some cash at you to get it. As a result, at the peak of the cashback frenzy, SMH says there were 35 lenders offering a cashback. By January, it had dropped to 11. We have 6 lenders on our panel right now, offering between $2,000 and $4,000 cash back.
A cashback doesn't always mean a great deal. A cashback on a loan that is 1% more expensive than other loans isn't actually saving you money, so make sure you compare all the fees and rates. Rebecca Jarrett-Dalton, founder and broker at Two Red Shoes, says the devil is in the details: "With cashback offers, [ask] what are the conditions and are you actually saving money after your costs – both now, and in the longer run? What is the history of that lender for keeping rates stable?"
If you can find that sweet spot – a mortgage with a low interest rate, low ongoing fees and a hefty cash back offer – you'll be onto a winner.
Get up to $4,000 back on your home loan, with interest rates as low as 5.96% p.a. fixed or 6.14% p.a. variable – check out the latest cashback home loan offers now
