More home loan lenders offering cashback deals, but are they worth it?

By Niko Iliakis · · 2 min read
Fact Checked
Advertiser disclosure
Australian notes and coins.

With so many lenders sharpening home loan rates, it’s easy to forget there’s a floor to how low they can go. Nowadays, many lenders are looking beyond pricing to attract customers, and cashback offers are among the most popular strategies.

These are one-off sums paid out to borrowers, usually in the range of $1,000 to $3,000, which can be used for any purpose including paying off your mortgage. 

Among lenders we track, 19 currently offer home loan cashback deals, up from seven in 2019. 

But it’s not just the popularity of cashback deals that has increased. In the past two years, the average amount on offer has also climbed from $1,671 to $2,541.

At the time of writing, HSBC offers the most generous cashback deal at $3,288, available on its 2.19% p.a. (2.20% p.a. comparison rate*) Home Value Loan for borrowers with a deposit of at least 30%.

Among fixed rate home loans, ING’s Fixed Rate Loan with Orange Advantage, which offers rates as low as 1.84% p.a. (3.73% p.a. comparison rate*) on 2-year terms, hopes to attract refinancers with a welcome bonus of $3,000.

RELATED: How to boost your chances of home loan approval

While such offers might be tempting, Mozo spokesperson Tom Godfrey reminds borrowers not to put a quick cash boost ahead of long-term savings.

“Lenders offer cashback incentives for various reasons and it’s not always to get you into their best value loan,” he said.

“It’s worth remembering that one of the best ways to improve your cash position is tapping into the best rate you can find and avoiding higher monthly repayments.”

He also warns against switching across lenders just to take advantage of a sign-up bonus, a move which might prove much more costly and time intensive than anticipated.

"If you’re just keen to get some ‘quick cash’ and then switch again to a better interest rate with another lender, you need to ensure you factor in any fees such as establishment and discharge fees which could reduce the potential benefit you might receive,” he said.

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.

 

Home loan comparisons on Mozo - last updated 23 April 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Featured Product
    Mozo Expert Choice Badge
    Unloan Variable

    Owner Occupier, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    5.90% p.a.

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

    Compare
    Go to site
    Details
  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

    Compare
    Go to site
    Details
  • Flex Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a.
    fixed 3 years
    6.37% p.a.

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    Compare
    Go to site
    Details
  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

    Compare
    Details
  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

    Compare
    Go to site
    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.