Major banks turn their back on home loan cashbacks

Home loan customers will be interested to know that some banks are ending their current cashback offers for refinance home loans.  

Commonwealth Bank and NAB are among those scrapping cashback offers as we approach mid-year.

For example, CommBank is ending its $2,000 cashback offer by 31 May. The bank says this has come about due to squeezing interest margins - a concern that is contrary to its recent financial success.

NAB’s digital bank Ubank also ended its $4,000 - $5,000 cashback offer in April, while NAB itself is ending its $2,000 cashback offer in June.

While NAB hasn’t given an official statement as to why, the bank’s group executive of personal banking Rachel Slade said at the Australian Financial Review Banking Summit in March, “I hate cashbacks. I look forward to the day where they don’t exist in the market.”

What are cashback offers?

Cashback offers are a strategy to encourage mortgage holders to refinance their home loans with a new lender. The lender offers you cash (usually several thousand dollars) as a benefit for switching your home loan.

While it might seem like an amazing benefit, keep in mind that not all loans that have cashback perks offer better interest rates. In fact, some of them might be a bit higher compared to refinancing to a home loan product without a cashback offer. 

Currently, there are 25 lenders who provide cashback offers. Amongst them are Westpac with a $3,500 cashback offer, ANZ with a $4,000 cashback offer, and Bank of Queensland with a $3,000 offer if you apply by 8th September 2023. 

For more information on lending trends, head over to our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.