The short answer
- Cashback is real money, usually $2,000 to $4,000 when you refinance, but fewer lenders offer it than a few years ago.
- A lower interest rate usually saves more over time than a one-off payment.
- Read the conditions: minimum loan sizes, an 80% LVR limit, and clawback if you leave within 12 to 24 months.
- Count the cost of switching, especially break costs on a fixed loan.
- Cashback works best when it comes with a competitive rate, not instead of one.
What cashback offers look like in 2026
As at October 2026, most refinance cashback offers are between $2,000 and $4,000, often tiered by loan size. Many of them come from smaller banks and credit unions rather than the major banks. Source: Canstar
Common conditions include:
- A minimum loan size, usually $250,000 or more, and sometimes much higher for the top amount.
- A loan-to-value ratio of 80% or less.
- Payment after settlement, often 60 to 90 days later.
- A clawback if you refinance away within a set time, typically 12 to 24 months. Source: Mozo
- One cashback per application in a 12-month period, and no cashback for moving between lenders in the same banking group.
Cashback vs a lower rate
Here's a simple comparison on a $500,000 loan over 30 years. Loan A offers a $3,000 cashback at 6.25%. Loan B has no cashback at 6.00%.
| After | Extra interest at the higher rate | Cashback left after extra interest |
|---|---|---|
| 1 year | $1,251 | $1,749 |
| 2 years | $2,504 | $496 |
| 3 years | $3,758 | -$758 |
| 5 years | $6,264 | -$3,264 |
Example only. Principal and interest repayments, rates unchanged, ignoring fees. In this example the cashback is used up after about 29 months.
A 0.25% difference wipes out a $3,000 cashback in a little over two years. If you're likely to keep the loan longer than that, the lower rate wins. If the rates are the same or very close, the cashback is a genuine bonus.
Don't forget the cost of switching
- Discharge fees from your current lender.
- Government fees to register the new mortgage and remove the old one.
- Break costs if you're leaving a fixed rate early, which can be far more than any cashback. Source: Moneysmart
- Lenders mortgage insurance if you owe more than 80% of your home's value, though most cashback offers need 80% or less anyway.
- Package fees on some loans, which add to the total cost each year.
A cashback that covers these costs can make switching easier. One that doesn't is just a smaller discount than it looks. Our refinance guide runs through the costs in more detail.
When cashback is worth it
- The rate and fees are as good as, or close to, the best alternatives.
- You plan to keep the loan well beyond the clawback period.
- It covers, or more than covers, your switching costs.
- Your loan comfortably meets the minimum size and LVR.
When it's mostly marketing
- The rate is higher than other loans you could get, so you pay it back in interest.
- The loan has an annual package fee that eats the cashback over time.
- You might sell or refinance again within the clawback period.
- It's tempting you away from a loan with better features, like a full offset account.
Before you switch, it's also worth asking your current lender for a better rate. Many will offer one to keep you, and it costs nothing to ask.
Information is general and correct as at October 2026. Cashback offers change often and some end without notice. Check the current terms before you apply.