Refinance cashback offers: how to check the conditions before you count the money

A refinance cashback offer can make a home loan switch look far more attractive than the interest rate alone suggests. It is also the part of a refinance most likely to change between the day you see the advertisement and the day you sign.

The useful question is not "how much is the cashback?" but "what has to be true for me to actually receive it, and what would make me give it back?" This guide walks through the checks, in the order that matters.

What a cashback offer actually is

A refinance cashback is a one-off payment a lender makes after you move an existing home loan to them and settlement completes. It is separate from the ongoing benefit of a lower interest rate, and it behaves differently in your maths:

• A lower rate compounds for as long as you hold the loan.
• Cashback arrives once, and it is usually taxable-neutral for a private homeowner — it isn't income you declare in the way wages are, but you should confirm the treatment that applies to your situation with a tax professional rather than assume it.

That difference is why a large cashback on a slightly higher rate can still lose to a smaller cashback on a lower rate over a realistic holding period. Cashback should be the tiebreaker between two loans you'd otherwise be happy with, not the reason you pick a loan.

Start from the switching decision, not the offer

Moneysmart, ASIC's consumer money website, sets out a "what to check before switching home loans" step, and its advice is a helpful ordering device: build a shortlist of potential loans and identify the fees involved, then use the mortgage switching calculator to work out whether you'd actually save money by changing.

Cashback fits naturally at the end of that sequence. Upfront, the things you need on paper for each candidate loan are:

• the interest rate and whether it is variable, fixed or split
• the comparison rate, which folds the headline rate together with most fees and lets you compare loans of the same size and term on a like-for-like basis
• discharge and settlement costs on your current loan
• application, valuation and settlement fees on the new loan
• any ongoing fees, including annual or package fees
• any government charges that apply in your state or territory

Moneysmart's switching guidance is worth reading in full before you commit, because it covers loan features and exit costs that are easy to overlook when an offer has a deadline attached.

The conditions that decide whether you keep the money

Cashback offers are conditional. The details vary by lender and by campaign, so treat the following as the checklist of conditions to locate in writing — not as an assumption about any particular offer.

1. Is the offer still current? Campaigns start and stop. Confirm the end date and confirm that the specific product you're applying for is included. An advertised offer may apply to one product in a lender's range and not to the one that best fits your circumstances.

2. What is the minimum loan amount? Many offers require the new loan to be at or above a set dollar figure. If your loan is smaller, the advertised payment may not apply.

3. What is the maximum loan-to-value ratio? Offers are often limited to borrowers below a certain LVR. If your property value or loan size puts you above that limit, the offer may not be available.

4. Owner-occupier or investor? Some offers apply only to owner-occupied lending or only to principal-and-interest repayments. Interest-only and investor loans can be excluded.

5. Are you a new customer? Some offers are only available to borrowers who don't already hold a loan with that lender or its related brands.

6. Minimum refinance amount. Some offers require you to bring across a minimum amount of new lending, not just any amount.

7. When is it paid? Confirm whether payment happens at settlement, shortly after, or after a set number of repayments, and confirm how it is delivered — a direct payment to you, or a credit applied to the loan balance. The second option reduces your debt rather than putting money in your account, which changes what you can do with it.

8. The clawback condition. This is the one people miss. Many offers require the loan to remain with the lender for a minimum period, or require you to meet conduct conditions such as not missing repayments and not refinancing away early. If you break the condition, the lender may require the cashback to be repaid. Ask specifically: what triggers a clawback, how long does the period last, and is repayment partial or full?

Questions to put to the lender in writing

Verbal confirmation during a sales conversation is not enough. Ask for the conditions in an email, a product document, or the offer's terms page, and file it.

Question	Why it matters
Does this offer apply to the exact product and rate I'm applying for?	Campaigns are often product-specific.
What is the application and settlement deadline?	Determines whether switching is feasible in the time available.
What minimum loan size, LVR and repayment type apply?	These are the most common reasons an application doesn't qualify.
Is the payment credited to my loan or paid to me, and when?	Changes what you can do with the money and when it arrives.
What must I do to keep it, and for how long?	The clawback condition.
Can the offer be withdrawn or varied before settlement?	Tells you whether the number in your spreadsheet is reliable.
Does it apply to one loan or multiple loans I'm moving?	Some offers cap the number of eligible loans.

If a lender can't confirm an answer in writing, treat the cashback as unconfirmed and run your switching calculation without it.

Running the actual numbers

Once you have a shortlist, Moneysmart's mortgage switching calculator is the right tool for the underlying decision: whether switching saves you money once fees are included. Use it on the loan features themselves.

Then add cashback as a separate line so you can see how much work it's doing. A useful sanity test:

1. Work out your net saving from switching over the period you realistically expect to hold the loan, after all upfront costs.
2. Add the cashback.
3. Ask whether you'd still switch if the cashback disappeared.

If the answer to step 3 is no, the cashback is carrying the decision — and cashback is the element most likely to change, be withdrawn, or come with conditions you later regret.

Also check the switching costs on your current loan. Break fees on a fixed rate, discharge fees, and the loss of an offset account or a package you actually use can all eat into a one-off payment. Moneysmart's switching guidance covers what to check on the loan you're leaving.

Timing and practical sequence

A refinance has a sequence, and cashback deadlines sit on top of it. In broad terms: application and credit assessment, valuation, approval, discharge of the old loan, and settlement of the new one. Delays in valuation or discharge can push settlement past an offer's end date.

Practical steps that reduce that risk:

• Confirm in writing whether the offer is locked in at application or at settlement.
• Apply early enough that a valuation delay doesn't cost you the offer.
• Keep your current loan's repayments up to date during the switch; missed payments can affect the new application and, in some offers, eligibility for the payment.
• Don't assume the new lender handles discharge of the old loan automatically — confirm who does what.

Red flags worth pausing on

• An offer that only makes sense if you ignore the comparison rate.
• Pressure framed around a deadline, with conditions that can't be produced in writing.
• A cashback figure used to justify a loan with a higher rate, fees or fewer features than an alternative you've already found.
• An offer that requires you to borrow more than you intended, or to consolidate other debts into the home loan, to qualify.

Next steps

Pick two or three candidate loans, write down the rate, comparison rate and every fee for each, and run them through Moneysmart's mortgage switching calculator. Then contact each lender and get the cashback conditions in writing using the table above. If the offer survives that check and the switch still saves money without it, it's a genuine bonus rather than the reason for the decision.

You can compare current home loan options and what they cost to run at /money/home-loans/, or use /match/ to see which lenders' criteria you're likely to meet before you apply.

General information only

This article is general information about how refinance cashback offers work in Australia. It is not legal, tax, credit or financial advice, and it does not take into account your objectives, financial situation or needs. Offers, eligibility criteria and loan terms change frequently and vary between lenders; confirm current details directly with the lender and read the offer's terms before you rely on them. Consider speaking to a licensed mortgage broker or financial adviser about your circumstances. Australian Cash is not a lender, broker, government body or regulator, and does not approve loans or set lender offers.