In a win for consumers, The Australian Securities and Investments Commission (ASIC) has this week initiated a review of the motor vehicle finance sector to enhance consumer outcomes, especially for those in regional and remote areas.
This action is driven by concerns over potential misconduct in used car financing targeting vulnerable consumers. The review will assess the compliance of lenders, brokers, and intermediaries with regulatory obligations, focusing on loan defaults, hardship practices, and dispute resolution processes. Notably, ASIC has ongoing legal proceedings against several car finance which highlight the need for a comprehensive sector review to identify and address practices detrimental to consumers.
We come across a lot of “questionable” car finance deals when preparing finance applications, see we see this is a very positive step.
In this week’s newsletter, we revisit cashback offers which may be making somewhat of a comeback.
Home loan cashback offers are incentives provided by lenders to attract new borrowers or encourage existing ones to refinance their mortgages. These offers typically involve a cash payment, ranging from $2,000 to $10,000, credited to the borrower’s account upon settlement of the loan.
The primary goal is to entice borrowers to switch lenders or take out new loans by offsetting some of the costs associated with refinancing or purchasing a property.
Trends Over the Past Few Years
During the early 2020s, especially when the Reserve Bank of Australia’s (RBA) cash rate was at historic lows, many lenders introduced cashback offers to differentiate themselves in a competitive market. At one point, over 30 banks and lenders offered such incentives.
However, as the RBA began increasing the cash rate to combat inflation, the cost of funds for banks rose, leading several major banks—such as Westpac, NAB, and Commonwealth Bank—to withdraw their cashback promotions in 2023 due to shrinking profit margins.
Despite this reduction, some lenders continued to offer cashbacks. For instance, ANZ maintained its $2,000 cashback for eligible refinances, with no explicit end date. Additionally, with the RBA implementing a rate cut in February 2025, there is potential for more lenders to reintroduce or enhance cashback offers to attract customers in a now more favorable interest rate environment.
Current Availability
As of March 2025, several lenders continue to provide cashback offers. For example, ANZ offers $2,000 for refinancers and $3,000 for first-home buyers on loans of $250,000 or more.
ME Bank provides $3,000 for loans exceeding $700,000. Greater Bank offers up to $2,500 for refinancers, while Newcastle Permanent provides up to $3,000 for both purchasers and refinancers. Regional Australia Bank has a tiered cashback system, offering between $2,000 and $4,000 depending on the loan amount.
Considerations for Borrowers
While cashback offers can provide immediate financial benefits, borrowers need to assess the overall value of the loan. It’s crucial to consider factors such as interest rates, loan terms, fees, and features. A cashback offer might be less advantageous if it’s attached to a loan with a higher interest rate or unfavourable terms.
Our role as brokers is to help clients navigate the pros and cons of these offers to ensure they have the loan best suited to their needs.
Variable
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.
1 Year Fixed
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.
