Attention, homeowners! A cash war has erupted among banks, and it's a battle for your mortgage. But here's the twist: you could be the winner!
In a surprising move, banks are offering generous cashback deals to borrowers who switch lenders. Imagine getting up to $5000 or even 300,000 Qantas points just for changing your mortgage provider! And the best part? You won't have to compromise on loan terms or rates.
Finder.com.au's analysis reveals a fierce competition in the loan sector. Graham Cooke, their head of consumer research, explains that banks are throwing money at borrowers to gain a larger share of the mortgage market. It's a strategy to stand out in a crowded field, as home loans are becoming increasingly standardized.
Among the most generous offers is BankVic, providing a cashback of $4000-$5000 for refinancers, with an interest rate of 5.35%. IMB and ME Bank are also in the game, offering $2000-$4000 and $3000 cashbacks, respectively. Other lenders, like AMP, Greater Bank, and Bank of Queensland, are joining the cashback frenzy, with deals ranging from $2000 to $3000.
But here's where it gets controversial: these deals might not last forever. Richard Whitten, Finder's home loans expert, warns that many lenders are offering cashbacks to borrowers who fix their interest rates. It's a strategic move by lenders, anticipating further rate cuts and wanting to lock borrowers into slightly higher rates today.
And this is the part most people miss: most refinancers are not switching lenders to save money but to access equity. The Reserve Bank's decision to hold interest rates in November has slightly changed this trend. While cashbacks will likely continue to attract new business, the number of lenders offering these deals may decrease if rate cuts are off the table, as seems to be the case for now.
A Finder poll of economists predicts another rate cut between February and May next year, primarily due to labor market weaknesses. So, will bank cashbacks encourage more refinancing activity? Aidan Hartley, director of Owl Home Loans, believes it could be an attempt by lenders to boost slow refinancing rates.
However, Hartley emphasizes that the features of a loan are often more crucial than short-term cashbacks or rates. He advises borrowers to prioritize loans that allow extra repayments, such as those with offset accounts, and then focus on the rate. Cashbacks, he suggests, should be seen as a bonus.
So, are you ready to take advantage of these surprising cashback deals? It's a unique opportunity to benefit from the banks' competition. But remember, it's essential to consider the long-term benefits of your loan, not just the immediate cash incentives. What do you think? Will you be switching lenders to grab these deals? We'd love to hear your thoughts in the comments!
