Aug 22, 2022 1:37:28 PM

Cash Back Incentives and Cost of Living Concerns

Topics: Interest Rates, Mortgage Broker, Home Loan 0

Recent interest rate hikes have many homeowners in Australia considering switching to a lower-rate home loan lender. And with more cash rate hikes by the Reserve Bank of Australia predicted, it’s likely the rate of refinancing will continue to grow. But it’s not just a lower interest rate that’s drawing new and existing customers to lenders. As refinancing competition heats up, lenders are getting creative about the incentives they’re offering to mortgagors, with many now targeting offers that help combat cost of living expenses.

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Creative incentives to entice borrowers

As the impact of rising interest rates and higher inflation is felt by many across Australia, home loan lenders are rolling out offers and incentives to attract first home buyers and refinancers.Sizeable cashback offers have been the norm since the COVID-19 pandemic, with offers between $2,000 and $4,000 often on the table. But other incentives offered by lenders now include free internet plans, energy-saving deals, and frequent flyer points.

Commonwealth Bank of Australia (CBA) has partnered with telecom provider, More, to offer eligible pre-approved home loan customers access to free nbn plans for three years, and a 30 per cent discount for existing CBA customers signing up to More nbn plans. The deal could save homeowners over $2,700.

Suncorp Bank is offering eligible home loan customers the option to install a range of energy-efficient features with a reduced variable equity home loan offer. The Green Upgrades Home Loan provides borrowers with between $10,000 and $25,000 to install or upgrade sustainability features to their home, such as a solar hot water system, solar batteries, home insulation or energy-efficient glazing and windows.

Qudos Bank offers eligible borrowers Qantas Loyalty Points when signing up for a home loan. While St.George, BOQ, and UBank are offering reduced or waived Lenders’ Mortgage Insurance to eligible first home buyers. As one of the most expensive up-front costs when buying a home, easily amounting to tens of thousands of dollars, a saving on LMI is significant.

Cashback offers worth considering

With most lenders offering cashback deals to sweeten the refinancing process, it’s important to remember that interest rate is not the only consideration when it comes to choosing a lender.

Cashback offers typically mean the lender offers you an incentive to take out one of its products. This could be in the form of cash or used to cover fees you would otherwise be charged for signing up or for switching lenders.

Before committing to a particular home loan or lender, it’s important you read the Key Facts Sheet (KFS), Target Market Determination (TMD) and other applicable product documentation, to confirm the full details of the offer.

And if you are re-evaluating your current home loan and looking around for a more favourable interest rate, it’s worthwhile working with a Mortgage Express broker who can help you compare current offers and determine the right home loan for your situation.

Contact Mortgage Express today to talk to a mortgage broker in your area.

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.

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