Right now, the Australian property market is busier than ever. If you’re one of the many Australians looking to become a home owner or to refinance your current mortgage, you’ll want to hear about all the incentives that are available to you, such as home loan cash back deals.
It’s important to ensure that a home loan cash back deal is best for you and your borrowing needs before you make any commitments.
What is a home loan cash back deal?
A home loan cash back deal typically involves a lump sum being deposited into your bank account once you agree to a mortgage. The money is deposited by the lender once your home loan is settled, and it’s typically between $1,000 and $3,000.
What are the conditions of a home loan cash back deal?
Like most deals, a home loan cash back deal comes with conditions and criteria. Typically, there’s a minimum loan amount, and if you’re only applying for a smaller loan, then you may not qualify. It’s also common that you will have to take out a savings or transaction account with the lender to receive the payment from them.
You will also need to specify the purpose of the loan, as some cash back deals are limited to refinancers or specific home buyers. Most deals are also time-sensitive, so you must apply within a certain time frame and have your home loan settled by a certain date.
Is a home loan cash back deal better than a lower interest rate?
Home loan cash back deals can be tempting. This is because they sound like ‘free money’ in exchange for your business. But you must ensure that the deal itself is suitable for you, regardless of the cash back offer.
While a lump sum of money might sound enticing, it’s important that you look over the deal carefully and consider whether it’s the best long-term option for your needs. Ultimately, a $1,000 – $3,000 cash back incentive may not be good value if it means you’re paying a higher interest rate than you could have found elsewhere.
In most circumstances, taking a home loan with a lower interest rate and minimal fees will save you much more money than taking a one-off home loan cash back deal. This is because you’ll be paying far less interest over time than the $1,000 – $3,000 cash back payment you’ll receive. Interest is by far the biggest cost of a home loan and even a slightly lower interest rate can save you a lot of money in the long run.
How we can help
If you’re thinking of getting a home loan or refinancing, our experienced and licensed brokers at Wisebuy Investment Group can answer any other questions you have. We can also help you to find and apply for the right loan for your needs.
We service a diverse range of clients in Newcastle, Lake Macquarie, Port Stephens, the Hunter Valley and the Central Coast.
Contact us today for an obligation-free chat!