Getting cash back on the mortgage
We get clients asking about bank cashback offers spurred along by social media posts stating you can get $30k cashback if you switch your mortgage.
Insights with Infinance by Brian Coogan
That may be true if you have a $3m mortgage, however in reality most banks typically provide up to 1% cashback of the value of the mortgage on a tiered basis with caps ranging up to $30k depending on the size of the loan and LVR position.
Most banks will advertise their first home buyer cashbacks on their respective websites typically offering a minimum $5k with a minimum $250k loan which is great for covering lawyer’s fees and a few moving in costs etc.
You’ll have to stay with the bank for 36 months or pay part of it back and of course most will want you to do all your banking with them.
For the rest, who are not first home buyers, incentives apply but it’s not as open.
They’re not advertised on their websites and as mortgage advisers we receive regular rate card updates with the word ‘confidential’ written all over it so we can’t share sorry, no head-to-head going on here today.
Subject to change, cashback offers come once a loan is approved.
We can however provide an overview, nothing specific, that says in general, most banks at the moment will stagger their cash backs from about 0.8% through to 1% with one building society going all the way to 1.25% with conditions.
Then there are percentage mixes between residential owner occupied, investment property, new builds, and of course, variations between loans under and over 80% LVR.
At the end of the day, it comes down to case-by-case scenarios with a mix of outcomes depending on inputs, but rule of thumb is about 1% cashback based on the value of the mortgage, not $30k off the bat as some would make it seem.
Registering a security interest with a new bank also requires a solicitor, adding fees, some banks fast track it on dollar-for-dollar refinances however conditions apply.
For more on the above go to www.infinance.co.nz/insights
Brought to you by Brian Coogan, Licensed Financial Adviser and Director at Infinance – Taupō.
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