Refinancing Rebates – What You Need to Know

May 30, 2017

Refinancing Rebates - What You Need to Know

Looking to refinance? Great news you can get paid to refinance! With the right lender at the right time, you can add rebates to your list of reasons why getting your mortgage refinanced is a smart financial move. So, which banks offer rebates and how can you get the best cashback deals and discounts?

When Do Banks Have Rebates for Refinancing?

You may have not noticed refinance rebates before because they aren’t always offered. Lenders only offer incentives when they need a competitive advantage to help them to grow their market share. For example, during overall market lulls, rebates can be used to attract borrowers to switch from another bank.

Several lenders have been including fantastic rebates if you refinance your home loan with them. Westpac is offering a $1250 Refinance Rebate if you currently have a mortgage with another lender and switch to them when you refinance. NAB recently offered $1,500 to new borrowers who also apply for a NAB credit card and transaction account. If you refinance to St. George’s Advantage Package Home Loan, you may be eligible for a $1500 rebate cheque.

Finding Available Rebate Offers

Lenders may offer cashback, as well as credits and other unique offers, which can be applied to your refinanced mortgage or to help you save. Getting a thousand or more as a rebate can help to reduce the cost of refinancing, making it an even more attractive option. Rebates can also come in the form of waived or discounted application fees or lower lender’s mortgage insurance premiums.

You can shop around to compare rebate offers when you are ready to refinance. Another option is to contact a mortgage broker. A good broker won’t just inform you about the most valuable rebates; they’ll also help you identify the perfect balance of rebate, interest rate, and home loan features for your unique situation.

If you do get a cash rebate, don’t forget to ensure your bank does credit your account or sends your cheque. As these offers are typically processed manually, it’s possible for your rebate to fall through the cracks and get lost if you don’t stay on top of it.

Is It Always Time to Refinance?

Even though rebates make refinancing a more appealing option, you shouldn’t necessarily switch banks simply for a cashback offer or discount. Refinancing is generally practical if you want to use your new loan to fund a renovation, investment, or a build. It can also be used to help you save money and reduce your loan faster.

However, if you’ve recently missed repayments on your mortgage or if you still owe 80 percent or more on your property’s value, even with cash back, you still may be better off biding your time and waiting for a better opportunity to refinance. For example, if you spend more time building up equity in your home, you may be eligible for a better rate, or be able to avoid paying lender’s mortgage insurance, which could easily save you more than a $1,500 rebate would.

Refinancing rebates are an excellent perk. When the decision to refinance has already been made, make sure to research special refinancing offers that lenders may be offering. As you compare the specifics of each bank – and each home loan package – factor in the genuine value of the rebate you will receive. If you weren’t ready to refinance, a rebate, as tempting as getting a cheque deposited in your account may be, may not be a strong enough reason to start the process.

Take the time to weigh the pros and cons of refinancing, based on your current situation. One thing is for sure, if you aren’t ready presently, refinancing will be a smart move at some point in the future. Many borrowers refinance after about three years to take advantage of more competitive rates.

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