Lenders are now offering a variety of incentives to attract new customers to take out home loans. Cashback home loan offers can help to offset the cost of switching loans or establishing a loan for first homeowners, but are they the best option available? Savvy can help you make the best financial decision by comparing home loans all in one place.
Cashback home loan offers are made by lenders as an incentive for potential new customers to take up a new loan with them. Ranging in value from $500 up to around $6,500, these cashback mortgage offers come in the form of either cash offers, or the equivalent reduction in an established loan amount, or the waiving of loan establishment fees to the value of the advertised cashback.
With competition between banks and lenders so fierce, lenders use these cashback home loan offers to entice new customers. Some may offer a fantastic opportunity to first home buyers and refinancers alike, but other such cashback offers need more scrutiny.
The bottom line is that the home loan interest rate offered, combined with interest-saving loan features (such as offset accounts and the ability to make lump sum repayments) will probably be far more important long-term to the overall cost of the loan than any small cash incentives. For example, be wary of putting your stock in ‘cashback offers’ which are, in effect, just a waiving of loan establishment fees that may never have been charged in the first place.
Savvy compares home loans and presents financial information about the true cost of loans side-by-side so that you’re able to make the best financial decisions for your particular family’s circumstances.
Make sure your cashback offer is a genuine one
Genuine cashback offers present a great opportunity for first home buyers and refinancers to offset the cost of early exit or break fees and switch loans at no cost. These great cashback deals come with a very low interest rate and offer genuine cash placed in a linked offset or transaction account that is opened at the same time as the loan is taken out.
Lenders place various limitations and restrictions on home loan cashback refinance offers. They fall into several categories:
Some home loan cashback offers have almost no limiting factors, and cashback offers can be a welcome relief to first homebuyers coping with the high expense of setting up a new home. You should compare offers with Savvy to make sure you’re getting the best interest rate available and the best deal possible.