Refinance activity surged through 2022 and early 2023 as the Reserve Bank of Australia raised the cash rate at the fastest pace in a generation. Lenders competed fiercely, dangling cashback offers that hit $6,000 for eligible borrowers. That landscape has shifted. The cash rate has sat at 4.35% since November 2023, refinancing volumes have slumped 25% from their May 2023 peak, and the major banks have almost entirely withdrawn cashback incentives. APRA’s serviceability buffer, fixed at 3.00 percentage points since the July 2021 letter to ADIs—and reaffirmed in its 24 January 2024 correspondence—continues to shape which borrowers can move and at what cost. For an owner-occupier rolling off a fixed rate this year, or an investor watching equity grow while repayment buffers tighten, the question is no longer simply “where is the highest cashback,” but whether a headline figure survives a hard look at eligibility, clawback terms, and the real cost of switching. This article maps current offers from lenders still deploying cashbacks, isolates the fine print that erodes value, and sets out a framework to decide when a cashback justifies the paperwork.
Why Cashback Offers Have Disappeared at the Majors
The Rate-Cycle Squeeze
When the RBA lifted the cash rate from 0.10% in May 2022 to 4.35% by November 2023, refinancing became a rate-chasing exercise. Borrowers switched lenders every 12–18 months, and lenders paid cashbacks of $2,000 to $6,000 to acquire loans. As the rate cycle paused, churn slowed. With the RBA’s 7 November 2023 Statement on Monetary Policy projecting inflation to reach the 2–3% target band by late 2025, borrowers began anchoring to a view that the terminal rate had been reached. CBA and Westpac withdrew owner-occupier refinance cashbacks entirely in the first half of 2023; NAB axed its last $2,000 offer for new applications on 17 November 2023. ANZ stopped accepting refinance cashback applications on 13 August 2023. The logic was simple: paying acquisition costs on loans that may not break even for three years no longer made sense when net interest margins were under pressure.
APRA Buffer Bites into Profitability
APRA’s prudential standard, detailed in Prudential Practice Guide APG 223 (updated 12 April 2024), requires lenders to assess new borrowers at an interest rate that is the higher of the product rate plus a 3.00 percentage point serviceability buffer or a prescribed floor rate. With the cash rate at 4.35%, that means many owner-occupier loans are being tested above 7.00%. A borrower on a 6.24% variable rate must pass serviceability at 9.24%—a level that automatically excludes refinancers with high debt-to-income ratios. Lenders incur compliance costs reviewing applications that fail this hurdle, and cashback offers add $2,000 to $3,000 of upfront acquisition cost per successful loan. When fewer applications convert to settled loans, the economics of cashback campaigns deteriorate. This is why remaining offers are tightly targeted: lower LVRs, loan minimums, and strict DTI caps.
Current Refinance Cashback Deals (as at June 2024)
Owner-Occupier Cashbacks
A handful of lenders still use cashbacks to lure owner-occupiers. According to St.George’s home loan product page (accessed 20 June 2024) and Bank of Melbourne’s equivalent listing, eligible refinancers can claim $2,000 on loans of at least $250,000 with an LVR no higher than 80%. ME Bank’s website, also accessed on the same date, shows a $2,500 cashback for owner-occupier principal-and-interest loans with LVR ≤ 80% and a minimum loan size of $300,000. IMB Bank goes further, offering $3,000 on loans of $500,000 or more, capped at 80% LVR for package home loans. Suncorp Bank still advertises $2,000 for refinancers borrowing above $250,000 with LVR ≤ 90%, though the offer is limited to applications submitted through brokers.
These figures are simple to compare, but the net benefit shrinks quickly once you factor in the rate offered. ME Bank’s basic variable rate for owner-occupiers with 70% LVR was 6.04% p.a. (comparison rate 6.07% p.a.) on the same date, while another lender offering no cashback might price at 5.92% p.a. The $2,500 cashback could be consumed in 18 months by the rate differential.
Investor Cashbacks
Investor refinances attract even fewer cashbacks. St.George and Bank of Melbourne both list a $2,000 cashback for investor principal-and-interest loans above $250,000 with LVR ≤ 80%. AMP Bank’s website (accessed 20 June 2024) shows a $3,000 cashback for investment loans of at least $500,000, but eligibility requires an LVR of 70% or lower and a credit score above 700. No major bank currently offers an investor cashback. The investor spaces where cashbacks exist almost all require a clean repayment history and evidence of rental income covering 120–130% of the new mortgage repayment at the assessment rate, inline with APRA’s directive on interest-only lending.
Fine Print: Eligibility Hurdles and Clawbacks
LVR and DTI Caps
Lenders controlling for risk restrict cashback eligibility to borrowers who sit well inside policy buffers. The LVR cap of 80% is almost universal among the remaining deals—this avoids the need to factor in LMI premiums, which would inflate the lender’s cost. Where exceptions exist, they add further constraints. Suncorp’s broker-exclusive owner-occupier cashback allows LVR up to 90% but applies a DTI limit of 6.0 times total income. A single applicant earning $110,000 with a $600,000 loan and a $15,000 car loan sits at DTI 5.8 and scrapes through. A couple with a combined $160,000 income and the same loan faces 3.75 times DTI, well inside the cap, but if they carry a $40,000 HECS debt and a $25,000 personal loan, the lender will calculate DTI on all amortising commitments, which pushes it to 7.8 times—they are excluded. These calculations are embedded in lenders’ credit policy manuals and enforced through automated decision engines.
Loan Size Thresholds and Clawback Periods
Minimum loan sizes act as a second filter. The $250,000 threshold at St.George and Suncorp is the lowest available. ME Bank’s $300,000 floor eliminates refinancers in regional areas where mortgage sizes are smaller. IMB’s $500,000 minimum limits the offer to metro homeowners. Additionally, every cashback comes with a clawback clause. St.George requires the loan remain with the bank for 24 months; ME Bank’s clawback period is 24 months for the full $2,500, pro-rated after 12 months. AMP Bank applies a 36-month clawback on its $3,000 investor offer, reducing by $1,000 per year. If a borrower refinances again within 12 months, they must repay the entire cashback amount minus the cost of any government fees already paid on discharge. Clawbacks are enforceable and settlement statements itemise them as a debit. Borrowers who prize flexibility should treat a cashback as a retention tool for the lender rather than an unconditional bonus.
Net Benefit Calculation: Cashback vs. Rate
The Real Cost of Switching
Switching lenders incurs fees that are rarely offset by cashback alone. A typical owner-occupier refinance in NSW involves a lender discharge fee (often $325), a mortgage release fee ($150), and a registration fee for the new mortgage ($150). Total static costs: $625. If the loan is fixed and not yet at the end of its term, break costs can run into thousands. Westpac’s break cost calculator, for instance, showed a $4,800 break fee on a $400,000 loan fixed at 2.29% with 15 months remaining when wholesale rates fell—though this is less common as most fixed-rate expiries have already occurred. Borrowers on variable rates avoid break costs but may still face settlement fees on the new loan, such as an establishment fee (often waived) and property valuation charges (absorbed by the lender above 80% LVR). A borrower with an 85% LVR might be asked to pay a $300 valuation fee if the lender does not offer a free upfront valuation.
Example: $3,000 Cashback on a $500,000 Loan
Consider a couple refinancing a $500,000 owner-occupier loan at 80% LVR. They choose IMB Bank for its $3,000 cashback. Discharge fee from their existing lender is $295; NSW government fees total $300; no break costs since they hold a variable-rate loan. Switching costs equal $595. Net cash gain before interest rate comparison: $2,405. But IMB’s variable rate is 6.14% p.a. (comparison rate 6.19%). Another lender, offering no cashback, quotes 5.99% p.a. The annual interest difference is 0.15% of $500,000, or $750 in the first year. Over 24 months, the rate advantage saves $1,500—nearly two-thirds of the cashback value. The cashback puts money in the borrower’s pocket immediately, but the lower-rate loan is cheaper after 38 months. For a borrower who expects to hold the loan for five years, the lower rate dominates. This is the arithmetic lenders bank on: a cashback disguises a premium rate.
Actionable Takeaways
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Run a net cost comparison, not a headline sweep. Subtract discharge, registration, and any break costs from the cashback amount. If the cashback is $2,000 and switching costs are $620, the starting net gain is $1,380. Compare that to the present value of a rate differential over your expected loan life. A 0.10% p.a. difference on a $400,000 loan equals $400 in the first year, compounding.
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Check LVR and DTI before you apply, not after. Lenders with cashback offers often cap LVR at 80% and DTI at 6.0 times. If your LVR is 82%, you are excluded from all but one offer, and that offer may price the risk with a rate 0.25% higher. Pull your credit report and calculate DTI including HECS, credit card limits (capped at 3% of the limit as a monthly commitment by most lenders), and any personal loans before contacting a broker.
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Read the clawback clause and plan your hold period. If the clawback is 24 months and you think you might refinance again in 18 months, zero in on the pro-rata terms. Some lenders reclaim 100% of the cashback if you discharge within the first year, others reduce it by 50% in year two. Only accept a cashback if your hold horizon exceeds the clawback window.
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Ask your current lender for a rate match before leaving. Your existing bank’s retention team can often squeeze the rate down by 0.10–0.15% to avoid losing the loan, which may exceed the net cashback of switching after fees. Call with a formal discharge request in hand and a competing offer on the table.
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Treat the cashback as a one-off sweetener, not a reason to choose a loan. A $3,000 bonus on a 30-year loan is 0.02% of total interest payments at 6.00%. A rate difference of 0.15% shifts total interest by $16,000 on a $500,000 loan. Unless the cashback puts you in a genuine cash-flow improvement position now, the rate should drive the decision.