As of the end of June 2023, two of the largest banks in Australia will no longer offer cashback incentives to customers who refinance their home loans. Commonwealth Bank of Australia (CBA) will be ending its cashback offer on 31 May 2023, while National Australia Bank (NAB) will be discontinuing its offer after 30 June 2023. Observers say the other majors will be soon to follow.
Why Are Banks Stopping Their Cashback Offers?
Home Loan Experts founder Otto Dargan explained, “There has been an intense price war for the last year, in which banks have been offering cash to refinance. Sooner or later, someone had to pull out of the market.”
Home Loan Experts CEO Alan Hemmings further explained, “The major lenders have all made large profits this year off the back of the margins they achieved through the funding of low fixed rates. The government provided funds at very low rates to fixed-rate lenders over the past two years, increasing profitability for lenders. These low-rate terms will continue to run off over the next 12 months, lowering profitability. To combat this, lenders are removing the refinance rebates and reducing the discounts available for new loans.
Hemmings further added, “Lenders see the market changing to a purchase market over the coming months and may be getting ahead of that trend, too.”
Which Banks Will Stop Offering Refinance Cashbacks?
The following lenders have announced they will stop their cashback offers for refinancing:
|Lender||Cashback Amount||Last Date|
|CBA||$2,000||31 May 2023|
|NAB||$2,000||30 June 2023|
|Bankwest||$2,000||31 May 2023|
At present, ANZ and Westpac are the only major banks still offering cashback incentives for refinancing after 30 June 2023. Dargan expects the other major lenders to follow CBA and NAB soon.
You can use our refinance cashback calculator to see what offers are still available.
How Does Cashback Ending Affect You?
While it is still too early to tell how this will affect the market, Hemmings thinks it may slow down refinance activity, particularly from customers who were chasing the cashback offers. More importantly, he says, it will end discounts on interest rates for new loans, which will make it more difficult for some customers to find more competitive rates.
What Can You Do Now?
To make the most of the current situation, Hemmings advises homeowners, homebuyers and investors to do two things:
- Be aware of all the details about when a cashback offer will end. This includes knowing the last eligible dates for submission and settlement of your loan.
- Shop around for interest rates. Do not pay ‘loyalty tax’ by remaining with your existing lender. Take the help of an expert mortgage broker to find out the most competitive rates available in the market.
Navigating the ever-changing market can be challenging, but you don’t have to do it alone. At Home Loan Experts, our expert mortgage brokers are here to help you make informed decisions. We stay up to date on which lenders are still offering cashback for refinancing or purchasing a home. Don’t miss out! Call us on 1300 889 743 or enquire online for free, for more information.