When considering a home loan, homeowners and buyers often look for ways to save money. A cashback offer is an option that saves thousands. But are these offers worth it? In this article, we’ll take a closer look at cashback offers, so you can make an informed decision about whether this type of offer is right for you.
What is a Cashback Offer?
A cashback offer is a promotion offered by a select number of banks in Australia that provides customers with a cash refund or credit towards closing costs for refinancing or purchasing a home.
These offers can provide customers with up to $4,000 cash back, making the home loan process more affordable. However, not all banks provide cashback incentives, so check with your lender to see whether they have one. Following the settlement of the loan, the cash refund usually takes 6 weeks to process.
Pros and cons of Cashback Offers
| Pros | Cons |
| Can provide significant savings for the customer: One of the biggest advantages of cashback offers is that they can provide customers with significant savings. | Only available from a select number of banks: Cashback offers are only available from a select number of banks. This means that not all customers will be able to take advantage of these offers, and they may need to find a new lender that offers the promotion. |
| Helps make the home loan process more affordable: By reducing the overall cost of the loan, cashback offers can help to make the home loan process more affordable for customers. | Eligibility requirements may be strict: Customers must typically meet certain requirements set by the lender. Requirements can vary between lenders and may be strict, limiting the number of customers who are able to take advantage of these offers. |
| Can be used to pay for closing costs or other expenses associated with the loan: The cashback from a cashback offer can be used to pay for closing costs or other expenses associated with the loan. Reducing the financial burden of the loan. | The amount of cashback may be limited: The amount of cashback may be limited. This means customers may not be able to receive the full amount of cashback that they were hoping for, limiting the overall savings that they are able to achieve. |
| Freedom to use the money the way you want: You have the freedom to use the cash back the way you choose, such as on a holiday or just save it for the future. | May have conditions attached, such as a minimum loan amount or loan term: Cashback offers may have conditions attached, such as a minimum loan amount or loan term. Meaning customers may need to take out a larger loan or commit to a longer loan term to take advantage of the cashback offer. |
Who qualifies for Cashback Offers?
Who qualifies for cashback offers? Both owner-occupied and investment loans are eligible for cashback offers, providing a wide range of customers with the opportunity to receive a refund.
Both principal and interest and interest-only loan types are also able to qualify for cashback offers, giving customers even more flexibility in their home loan options.
The eligibility criteria for cashback offers for refinancing and new home purchases can vary between lenders. Some common eligibility requirements include:
- The homebuyer must have a good credit history and score.
- The homebuyer must have a stable income and employment history.
- The property must meet the lender’s property criteria.
- The homebuyer must meet the lender’s income and loan amount requirements.
The requirement for cashback offers for new home purchases may change over time, so it’s a good idea to check with your lender to determine if you are eligible.
Applying for a Cashback Offer
To apply for a cashback offer for a new home purchase, homebuyers will typically need to complete an application with the lender. This may involve providing information about their financial situation, employment history, and property details.
It’s important to provide accurate and complete information on the application, as the lender will use this information to determine if the homebuyer is eligible for the cashback offer. The lender may also conduct a credit check to verify the homebuyer’s credit history and score.
Are Cashback Offers right for you?
Whether a cashback offer is right for you will depend on your individual circumstances and financial goals. To determine if a cashback offer is a right option for you, you’ll need to consider factors such as your current interest rate, the terms of your current loan, and your overall financial situation.
We suggest working with a knowledgeable Finance Broker can help you compare different new purchase and refinance options to determine which one is right for you. This can help ensure that you make the best decision for your financial future and get the most out of your home loan.
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