As interest rates continue to rise, Australians are shopping around to find the most competitive loan offers and save money. With hundreds of incentives and products to choose from, making the right decision can often feel overwhelming. Loan cashback offers are one attractive option that can help you achieve your financial dreams and goals!

Here is what you need to know and keep in mind about these offers when looking for the right loan.

What are Loan Cashbacks?

Loan cashbacks, also known as lender cashbacks or loan cashback offers, are incentives offered by lenders to reward new customers and encourage borrowers to choose them when taking a home loan or refinancing.

They are essentially a fixed dollar amount the lender offers for a limited time, which can be a great way to get some extra cash and help cover other costs associated with buying a property (such as Lenders Mortgage Insurance (LMI) or Stamp Duty) or refinancing your existing loan.

In some cases, lenders may offer cashback rewards for specific types of loans. For example, green home loans or loans for properties with solar panels are often designed to encourage borrowers to invest in eco-friendly or sustainable properties, saving them money from the amount they are looking to borrow.

How do Cashback loans work?

In order to receive a lender cashback, you basically need to be looking for a new loan or be keen to refinance an existing one.

If the loan product you have selected has cashback offers attached to it and you are eligible to claim them, these will be paid into your nominated bank account roughly 4-6 weeks after the settlement of your loan.

It is very important that you keep in mind that cashback offers are often available for limited periods of time only, meaning you will want to stay abreast of potential changes to avoid missing out!

Working closely with your dedicated Rise High broker will ensure that you are always up to date with the latest cashback offers as well as others that might not be available to the general public. Comparing options from over 70 lenders in our panel, our team will be there to guide you and provide a clear outlook on the most suitable options to support you!

Are there any eligibility criteria?

When evaluating whether you may be eligible to claim any cashback offers, our team will keep into consideration various factors.

These include the type of loan, the amount you are looking to borrow, the Loan-to-Value ratio (LVR) and, if applicable, the preferred lender you have in mind.

As an example, a specific lender might have cashback offers available for borrowers who are looking to get a home loan of $200,000 or more with a loan-to-value ratio above 80%. They might also specify that offers are only applicable to clients who are looking to get a home loan and will not be applicable to those interested in applying for an investment loan.

With this in mind, and taking into consideration the pressure most Australians are currently feeling after continuous interest rate rises, we figured it would be useful for us to classify most cashback offers into one of two categories: refinance cashback offers and purchase cashbacks.

Refinance Loan Cashbacks

If you currently have a loan and have not recently reviewed it, you might be paying much more than you need to!

Reviewing your loan (refinancing it), opens up opportunities to not only secure a lower interest rate by negotiating with your lender or assessing what other lenders might have on offer, but also access refinance cashback offers.

Refinance cashback offers can be a great way to offset some of the costs associated with refinancing simultaneously putting some money back in your pockets! Considering the refinancing process can cost approximately $1,000, there are great chances you could offset the cost, save money upfront and continue saving long-term by repaying your loan’s amount at a lower interest rate.

The terms of a sample refinance cashback offer could look like:

• 4,000 cashback for loans over $200,000 with an LVR of 80% or less.
• $3,000 cashback for new home loans of $500,000 to less than $1 million with an LVR of 90% or less
• $5,000 cashback for new home loans of $1 million or more with an LVR of 90% or less

As mentioned previously, cashback offers fluctuate based on the loan amount you are looking to refinance and the loan-to-value ratio, among other factors.

Purchase Loan Cashbacks

If you are looking to purchase a new property, you might also be eligible for lender cashbacks. These will take into consideration all factors previously mentioned (your loan’s amount and LVR) and are likely to also be conditional on the type of purchase you are looking to make (buying a new home vs purchasing an investment property).

Loan cashback offers for purchase are great ways to offset other costs such as stamp duty or potential renovations you might have in mind for your future property. They can also be great ways to save money or build a safety buffer for future loan repayments!

Some examples of purchase cashback terms include:

• $4,000 cashback for loans between $250,000 and less than $1 million and $5,000 cashback for loans of $1 million or more with an LVR of 80% or less.
• $3,000 cashback for loans over $250,000 with an LVR of 80% or less for first home buyers only
• $3,000 cashback for new home loans of $500,000 to less than $1 million with an LVR of 90% or less and $4,000 cashback for new home loans of $1 million or more with an LVR of 90% or less

In these examples, the same lender might have different offers for clients based on the loan amount and LVR they are after. Making sure to keep these in mind when working with your dedicated Rise High broker, will ensure you ultimately get the most suitable deal based on your current financial needs!

Tips and Tricks

With eligibility criteria and basic considerations clear, you might be wondering if there are any tips and tricks you can consider to make the most out of these offers.

In our experience, the answer is most definitely, yes!

Working with our wonderful clients our team has discovered that even though you might not initially be eligible for an offer, looking into your loan’s structure and seeking to directly negotiate with your lender can be of great help.

If you are a seasoned property investor, or homeowner with more than one property, looking to apply for multiple cashbacks is also an option to save a great deal!

Ultimately, working with a professional that stays on top of all current offers and deals will place you in the best position to save more money. Our award-winning brokers are always happy to help through our fee-free service!

One final thought…

As attractive as cashback offers might seem, it is very important that you keep in mind that these incentives are only one of the factors you should consider when choosing a loan.

Keeping an open mind to ensure your interest rate, loan features and overall cost are the right ones is essential to making sure you make the best decision. Considering alternatives such as refinancing and debt consolidation can also be great if what you are looking for is being in a greater financial position.

At Rise High, we understand that navigating the complexities of your loan can be overwhelming. Our team is always here to support and guide you, so you can feel empowered to achieve your financial goals!

If you are looking for specific advice based on your current circumstances and the state of the lending market, please do not hesitate to reach out! We look forward to working with you to find the right option!