Cashback deals from lenders up a new record
More lenders are offering cashback offers on home loans since COVID-19, and this shift could very well resonate with borrowers, according to industry data.
Crunching the numbers, RateCity on Monday revealed that there are now 29 lenders offering cashback deals of up to $4,000 for the average homeowner looking to refinance their mortgage.
RateCity research director Sally Tindall describes this as a new record adding that this is more than twice the number available in February this year before the COVID-19 pandemic was declared.
Analysis from RateCity found that:
• 29 lenders are offering cashback deals, up from 12 in February;
• Deals range from $1,000 up to $4,000 for average mortgages;
• Most cashbacks are for refinancers only; and
• All big four banks are offering cashback deals (ANZ through a broker).
According to Tindall, with refinancing booming during COVID, cashbacks are an increasingly popular perk being offered by lenders to attract new customers.
Indeed, RFi Group data has revealed that besides lower rates, access a special offer/incentive is the most common reason behind refinancing for those who switched providers when they refinanced, with 1 in 5 of these borrowers indicating it was for this reason.
“The record number of cashback specials is an indication of the competitiveness of the refinancing market,” Tindall said.
“The rise in refinancing is forcing banks to be more competitive than ever.
“Banks need to be winning new business, not losing it, and they’re throwing large sums of cash at anyone willing to refinance, particularly if they’ve got a good track record of paying down their debt and a steady job,” she said.
And while most cashback deals were more expensive in the long term, Tindall said the tide is turning.
“Banks are increasingly offering sign-up specials on their lowest rate loans, making them far more competitive than they used to be,” she said.