If your mortgage is up for renewal and you haven’t received a cashback from the bank for a few years, looking at your options could be a great way to life-hack a little bit of the costs of living increases.

Non-advertised offers like a 4.99% 1 year fixed rate

Now is the perfect time to be shopping around and keeping the big banks honest. In the last week, non-advertised offers like a 4.99% 1-year fixed interest rate from one major bank and 5.99% 18-month and 2-year fixed rates with a 1% cashback from another major bank are out there, there are some incredible deals to be had.

These offers are essentially loss leaders, which means they are being offered at a lower rate than what the bank will make in the long run, in a hyper-competitive home loan lending market. So, if you’re in the market for a new mortgage, consider acting fast because they may not be around for long.

If you’re worried about the thought of higher repayments after coming off a low fixed rate in the next few months, then refinancing or hustling your bank could be the way to go. It’s always a good idea to keep your options open and look for the best deal that suits your needs.

What is a bank cash contribution and how does it work?

This strategy involves the bank offering cash upfront to clients who take out new lending or refinance their existing mortgages. This is a fantastic opportunity for those who are looking to save money on the costs of living increases or who simply want to secure a great deal on their mortgage.

In practice, the bank will require the client to sign a deed of acknowledgement, which contractually ties them to the banking relationship for a period of 3 or 4 years. This agreement ensures that the client agrees to repay all or some (usually on a pro-rata basis) of the cash contribution if they repay their lending within a certain period of time, which is typically 4 years.

Up to 1% cashback capping this as high as $25,000

In practice, the bank will require the client to sign a deed of acknowledgement, which contractually ties them to the banking relationship for a period of 3 or 4 years. This agreement ensures that the client agrees to repay all or some (usually on a pro-rata basis) of the cash contribution if they repay their lending within a certain period of time, which is typically 4 years.

In the current environment, banks are offering up to 1% cashback, with some banks capping this at as high as $25,000 😲 (i.e. 1% on a $2,500,000 mortgage).

At Float, we understand the importance of providing our clients with access to the most up-to-date information. If you have any questions or are interested in learning more about the bank cash contribution and current interest rate offers or any other mortgage-related topic, don’t hesitate to get in touch with us. We are here to help you make the best financial decisions for your future.