Understanding Home Loan Cashbacks – Are They Worth It?

We’re starting to see major banks reintroduce cashback offers on new home loans. For homebuyers and homeowners looking to refinance, that’s a promising sign – it usually means competition between banks is heating up again and the property market is starting to move.

What is a Home Loan Cashback?

A cashback is a one-off payment made by your bank when your new home loan settles. Right now, some banks are offering around 1% of your loan amount as cashback.

So, if you’re borrowing $500,000, that’s roughly $5,000 paid directly into your account once your loan settles.

It’s often marketed as a “bonus” or “welcome gift,” but in reality, it’s a strategic incentive designed to attract your business.

Understand the Terms & Conditions

Cashbacks can be appealing, but they always come with terms and tie-ins. Most banks require you to stay with them for a set period, usually around three years. If you refinance or switch banks early, you’ll likely need to repay a portion of the cashback, calculated based on how many months are left in that period.

Each lender has different conditions. Some offer higher cashback amounts, others have shorter lock-ins, and some limit how soon you can make lump-sum repayments or restructure your loan. These fine-print details can make a big difference to your flexibility – and your overall savings.

How to Use Cashbacks Strategically

If used wisely, a cashback can help you:

• Cover upfront costs such as moving expenses, legal fees, or home improvements
• Offset immediate costs of refinancing
• Provide a short-term cash buffer for unexpected expenses

But it’s important to remember – the best deal isn’t always the one with the biggest cashback. A slightly lower interest rate or better long-term structure could save you much more over time than a one-off payout.

Why Talk to a Mortgage Adviser First

At The Mortgage Hub, we compare cashback offers across all major banks and help you understand the fine print before you sign.

Because while the idea of “free money” is tempting, the right home loan should fit your goals – not just your next three years, but your next 10 to 20.

“Cashbacks can be a smart incentive – as long as you understand the terms,” says Mils Muliaina, former All Black and now a qualified financial adviser at The Mortgage Hub.

Cashbacks are a sign of a competitive lending environment, and that’s good news for borrowers. 

Just make sure you’re not trading flexibility for a short-term win. A quick chat with a mortgage adviser can help you weigh up the real value of the offer and find the best structure for your long-term financial plan.

to learn more about Home Loan Cash Backs.

Let me help you compare your home loans and provide you with the best option for suits you, our advice is free.