Are you planning to apply for a home loan? Did you know that some banks will actually give you money to refinance your loan to them?
You can benefit from the intense competition between banks by switching to a bank that has a competitive interest rate and a cash rebate.
Current special offers
One of our lenders is offering a $1,500 cashback for people who refinance their mortgage to them. This rebate is on offer until further notice.
The qualifying criteria are:
- Available for both investors and people buying an owner occupied property.
- Your loan must be for at least $250,000.
- Your loan must be under the lender’s professional package.
- Pre-approvals, loan increases and internal refinances are not eligible.
- Only one rebate is permitted per application.
When will my rebate be paid?
In most cases the bank will pay your rebate within a month of your loan being advanced. Sometimes it can be up to 2 months.
The exact date can vary between different lenders.
Banks tend to pay the refinance rebate into your nominated transaction account whereas non-bank lenders typically deposit the funds into your loan account or mail you a cheque.
Is it worthwhile to refinance?
If you are refinancing to borrow additional money to invest, renovate or build then there is no best or worst time to refinance.
However if you are refinancing to save money then it is best not to refinance if:
- Your loan is for more than 80% of the property value.
- You have missed repayments on your home loan recently.
- Your loan has a fixed interest rate.
The people who get the biggest reduction in their interest rate from refinancing are those that have had their current home loan for more than three years. This is because older mortgages tend to have uncompetitive interest rates.
Hidden eligibility criteria
Some people apply to refinance to receive a lower interest rate and a rebate, however they end up missing out on the rebate because of a hidden catch in the terms and conditions of the offer.
The most common catches are:
- Your loan is not for the required purpose (e.g. construction loans may not be permitted)
- You do not have a transaction account with the lender
- Your application is delayed and misses the cut off date
By using a good mortgage broker you can be sure that you are eligible for the offer before you switch lenders unnecessarily.
The bank may forget to pay you!
The computer systems used by the banks do not normally have a function built into them to pay rebates to customers. These cash back offers are usually processed manually.
As a result it is common for small mistakes to occur and the rebate not to be paid. When your loan is advanced our mortgage brokers will set a reminder to check with you a month later to confirm that you have received your rebate.
Other rebate types
From time to time our banks may offer other special offers for people switching loans. These can range from special discounts on application fees, discounted LMI or the refund of the first annual fee for your professional package.
Please call us on 1300 889 743 to find out about these other offers.
Why do banks offer them?
Banks make these special offers to win market share during slow periods or known times when one type of borrower is very active.
For example in spring it is common for some banks to give a first home buyer rebate to try to capture more of the market during the spring home buying season. Whereas during quiet periods they will offer refinance rebates to attract people who are looking to save money on their home loan.
Contact a mortgage broker
Our specialist mortgage brokers know which banks have current special offers and will know which lender has the lowest cost loan for your situation.
We don’t just look at the available rebates, we consider the interest rate and LMI premium to make sure that you get the best deal possible.
Please call us on 1300 889 743 or enquire online to find out how we can help you to save money on your home loan.