Did you know that some banks will actually give you money to refinance your mortgage with them?
You can benefit from the intense competition between banks by switching to a lender that has a competitive interest rate and a cash rebate.
Current special offers
One of our lenders is offering a $2,000 cashback for people who refinance their mortgage to them. This rebate is on offer until 30 June 2018.
The qualifying criteria are:
- Must be from other financial institution (OFI), not an existing customer with the lender.
- Available to people buying an owner occupied property or an investment property
- Available on Lines of Credit (LOC).
- Only applicable to borrowers paying Principal and Interest (P&I), not interest only.
- Your loan must be for at least $250,000 (does not include top-up application if you’re already with this lender).
- 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.
- You’ll typically receive the $2,000 cashback within two weeks of home loan settlement, transferred to your transaction account.
Velocity Points special offer
One of our lenders is offering up to 500,000 Velocity Points to borrowers who refinance their mortgage to them. This offer is available until 30 September 2018.
The qualifying criteria are:
- Minimum loan amount is $250,000.
- $250,000-$1,000,000 loan refinance: 200,000 Velocity Points
- $1,000,000 or more loan refinance: 500,000 Velocity Points
- Not available to internal refinance: You must be refinancing from another financial institution (OFI) and not be an existing customer, nor a customer of a lender owned by this particular banking group.
- This offer is available to both investors and people buying an owner-occupied property.
- Available to borrowers that have chosen Principal and Interest (P&I) or interest only.
- You must refinance to the lender’s professional package.
- You must sign up to the Velocity Frequent Flyer program prior to settlement.
- Only one Velocity Points offer is permitted per application.
- Your Velocity Points can only be claimed upon settlement and will be issued to your Velocity Frequent Flyer account.
- An annual package fee will apply to the professional package (please ask your mortgage broker).
- This offer excludes borrowers applying for an equity release loan, a trust loan or a company loan.
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.