Some lenders give you a cashback when you get a home loan with them. Cashbacks are usually worth between $2,000 and $3,000 (but sometimes more!) and are mainly a way of encouraging borrowers to switch to the lender from a competitor.
Home loan cashbacks are extra money, deposited into your chosen bank account. There is no tax payable on these amounts and you can choose to spend them however you wish. Cashbacks can have some conditions attached that borrowers need to meet, like:
Minimum loan amount. Most cashback offers apply for loans $250k and above. If you're refinancing a small loan amount, say $100,000, you might not qualify.
Apply before the deadline. Cashbacks are usually offered for a limited time, with ledners specifying that you have to apply by a certain date and have the loan settled by a certain date.
Loan purpose. Some cashback offers are limited to refinancers, or are specific to homebuyers only (and not investors).
You need to meet the eligibility criteria, such as the type of loan and the amount you're borrowing. Once the cashback is approved, your lender will deposit it into your bank account, usually within around 30 days of your home loan settling.
Is a home loan cashback offer worth it?
Sign-up bonuses and cashback are attractive side benefits of a loan. They can be a massive bonus – who doesn't want a few grand for free?! – but don't get too distracted by them. If the loan itself isn't a good product for you, because the rate is too high or the terms aren't suitable, then the bonus just isn't worth it.
When comparing mortgages ask yourself this question: if they took away the special offer of a cashback, would this loan be right for me?
Always look at the following when examining home loan special offers:
Interest rate. Does this loan have a competitive interest rate, in line with the other cheapest rates in the market? Will it save you money even without the sign-up bonus?
Fine print. If the loan offers a special lower interest rate, is that just for the first year, or ongoing? Will the loan revert to a higher rate?
Loan features. The sign-up offer should not be the only reason you choose a certain home loan. Take into account all the features offered by the loan and whether they suit your needs.
Expert insight: The risks of cashbacks
"Cashbacks were initially offered to cover the switching costs associated with refinancing, but they quickly became a tool for banks to buy business and compensate customers for poor service over COVID. We had some clients receive over $20,000 in cashbacks for refinancing their properties. Whilst these are a great offer, it shouldn't be the sole reason to refinance your loan or pick a product provider. When we assess the suitability of a lender, we take into account your circumstances and match the right lending policy before anything else – then it is rates and fees and finally we look at cashback opportunities. We have seen many clients get into the wrong products because they were lured by a $2,000 sugar hit. These products can end up being tens of thousands of dollars more expensive in the long run."
Here's a hypothetical example of a refinance cashback offer that looks enticing but doesn't really benefit the borrower.
Your current loan: You're currently on a 6.25% interest rate with $300,000 left on your loan.
The offer: You see a package home loan with a $2,000 cashback offer and a lower 5.90% interest rate.
The comparison: You look around and see a few loans with a similar 5.90% rate but no cashback offer, so you go for the one that gives you $2,000. Makes sense, right?
But you don't want the offset account or the credit card, and you're currently getting a better deal on your insurance elsewhere. And that annual package fee? Well, in just 5 years it's eaten up the full $2,000 cash back.
If you switch to a similar loan with a 5.90% rate that doesn't have a $400 annual package fee, you'll be better off. Of course, if you made use of all the products in the package then the fee might be a small price to pay for the convenience of having all your products with one institution.
It all depends on your needs.
Expert insight: Can you still get cashbacks?
"Cashback offers are still available and can provide a financial boost during the settlement process. However, it's important to weigh the overall loan cost and terms, as cashback deals sometimes come with higher interest rates or fees. Always compare the long-term savings against the upfront reward."
What other kind of special offers do lenders provide?
Fee reduction or waived fees
Many lenders will waive or reduce fees for a limited time, so it's always worth asking the question. Given that application fees can cost $600 or more, this is a decent saving. As with home loan cashbacks, fee waivers usually have exclusions and eligibility criteria, such as time limits and minimum loan amounts.
Discounted interest rates
Discounted rates can save you a decent amount of money in the early stages of your loan. Be sure to compare the discount rate to other offers and watch out for the end of the offer period, when the rate will rise.
Package deals
Some lenders allow you to package things like credit cards, savings accounts and offset accounts with your home loan account. You can save by paying a combined annual fee for all products you've chosen to package, as well as enjoy the convenience of having all of your finances in one location.
Frequent flyer points
Some lenders have partnerships with frequent flyer rewards programs. The points you can gain from these loans can equal enough to cover an international flight. You can learn more about frequent flyer loans in our guide.
Frequently asked questions about home loan cashback offers
While there used to be many more home loan cashback offers for $4,000, currently there is only a couple. Most cashbacks are between $2,000 and $3,000. However, IMB, Credit Union SA and Regional Australia Bank is currently offering up to $4,000. For both of these the cashback amount depends on the value borrowed.
Yes. Most home loan cashback offers on the market are targeted at refinancers. That is, borrowers who already have a home loan and are looking to switch lender.
A home loan cashback gives you extra money. It's a tempting offer, especially if you were thinking about refinancing anyway.
There's only a downside if you focus too much on they cash and forget about the loan itself. In other words, make sure it's suitable home loan for your needs that has a competitive interest rate and minimal fees.
Why you can trust Finder's home loan experts
Obsessed with offers. We live track 20+ offers daily. Big banks, small, new and all inbetween, our goal is to get you more cash back in your pocket to make your re-fi worth it.
Ranked objectively. Nobody wants short term gain for long term crappy rates. That's why we score all home loans objectively so you can see how they stack up with a simple score out of 10.
No BS. We're not owned by a bank, we don't have a call centre. Our only mission is to match you with your next mortgage. Whether it's your first switch, or you're a cash back regular - we got you.
What is Finder Score?
The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.
Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio
Richard's expertise
Richard has written 618 Finder guides across topics including:
Learn how to compare rates to find the best home loan and start saving money on your mortgage today.
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Obsessed with offers. We live track 20+ offers daily. Big banks, small, new and all inbetween, our goal is to get you more cash back in your pocket to make your re-fi worth it.
Ranked objectively. Nobody wants short term gain for long term crappy rates. That's why we score all home loans objectively so you can see how they stack up with a simple score out of 10.
No BS. We're not owned by a bank, we don't have a call centre. Our only mission is to match you with your next mortgage. Whether it's your first switch, or you're a cash back regular - we got you.
