Refinancing cashback deals may become a thing of the past, after several big banks and smaller lenders, including Commonwealth Bank, NAB and Bankwest, announced they planned to phase out the incentive.
Now that some institutions have made the first move, it wouldn’t be surprising if other lenders followed suit, because cashback deals can have more downside than upside, for both lenders and borrowers.
Some lenders started offering cashback in previous years to differentiate themselves from their rivals and attract more refinancers. But once other lenders copied them, cashback ceased to be a point of difference and instead became an extra cost of doing business.
Surprisingly, though, borrowers could also benefit. That’s because cashback can be a false benefit, because lenders presumably pass on the cost to customers through higher rates or fees. Also, cashback can make it harder to weigh up the pros and cons of different loans, because you need to calculate how a loan’s upfront incentive fits in with its long-term value.
Expert guidance from a trusted broker
Regardless of what happens with cashback, your broker will help you compare thousands of loans from dozens of lenders.
They’ll crunch the numbers on your behalf, so you understand both the short-term and long-term implications of your options, and make expert recommendations.
Once you’ve chosen your preferred loan, your broker can manage the application process, saving you time and stress.
Get in touch with your Loan Market broker if you’d like to get the ball rolling on a new loan or a refinance.
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