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

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.

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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 26 February 2024

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  • Mozo Expert Choice Badge
    Home Fixed Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.80% p.a.
    fixed 3 years
    6.05% p.a.

    Enjoy the security of a competitive fixed interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply). Mozo Experts Choice award winner.

    Compare
    Details
  • Mozo Expert Choice Badge
    Home Variable Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.15% p.a.

    Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.

    Compare
    Details
  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

    Compare
    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

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