ubank has raised the stakes in the highly competitive home loan market – offering $6,000 cashback to new borrowers, one of the largest cashback amounts seen so far.
The digital bank, which is owned by NAB, has increased its home loan cashback offer from $4,000 to $6,000 for anyone who takes out a new home loan or brings over their existing home loan.
There’s intense competition amongst lenders offering cashbacks to capture the ever-growing number of mortgage holders seeking to refinance their loan. Variable rate borrowers are looking for better value following the Reserve Bank’s seven consecutive official cash rate hikes, with the OCR now sitting at 2.85%.
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Some fixed-rate borrowers face revert interest rates of above 7% when they come off their fixed-rate terms.
New data released by the ABS showed that refinancing volumes increased from $16.3bn in May 2020 to $33.2bn in January 2022, with volumes undoubtably higher since then.
According to Mozo, recent refi cashback offered by lenders to new clients included HSBC offering up to $3,288 cashback; Suncorp, and ING up to $3,000; BOQ up to $2,500 and Bankwest and Newcastle Permanent up to $2,000.
Kanishka Raja (pictured above), chief lending officer at ubank, said there was a mammoth 78% increase in digital home loan applications between January 2021 and August 2022 with the bank.
“In the current high inflation climate, refinancing home loans and searching for better deals has never been more frequent,” Raja said. “Everyone is looking for ways to get ahead.”
Raja said ubank wanted to help its customers get ahead with their money, which was why it increased its cashback offer.
“We’ve also extended the time frame of the offer so that more Australians can take advantage of it. In the current high inflation climate, we’ve seen the market move towards refinancing as more Australians look for ways to get ahead, including better home loan rates.”
Read more: Refinancing volumes soar in changing market
Nick Young, founder of Melbourne trail book buying company Trail Homes said the trend of mortgage holders wanting to regularly refinance their home loan was here to stay.
“This is a permanent change and someone wanting to refinance every three to four years is something brokers need to get used to and something they need to tap into,” Young said. “Servicing your existing clients and staying in regular contact with them is so important. Brokers need to pivot their business to ensure they are servicing all clients and not just looking at new business.”
The $6,000 cashback offering from ubank applies to applications received from November 10, 2022, to February 28, 2023, and settled by April 30, 2023. The minimum loan amount for a $6,000 cashback is $1m with a maximum of 80% LVR. The cashback offer excludes refinances within the NAB Group.
