The number of lenders offering cashbacks with mortgages has fallen from the peak of 35 in March last year to 11 now, comparison site RateCity reports.
Lenders have been withdrawing their cashback offers as the number of borrowers refinancing from low fixed rates has started to taper off. According to ABS lending data the value of external refinancing peaked around September and fell in the last few months of the year.
Others have stopped offering them as they have pulled back from the intense competition that marked the mortgage market last year.
Lenders still offering them include ANZ, Bank of China, Bank of Queensland, Bank SA, Greater Bank, ME Bank, Newcastle Permanent, Rams, Reduce Home Loans, St George Bank, and loans.com.au.
Most of the offers are for refinancers but some are available with new loans. Bank of China, Greater Bank and Reduce Home Loans are offering cashbacks with new loans.
The biggest criticism of cashbacks is that they are being offered by lenders that tend to have above-average mortgage rates, so that borrowers will pay more in the long run. Such arguments are inconclusive, given that the average loan life is only three to four years.
RateCity said other incentives on offer to attract borrowers include waived lenders mortgage insurance and Qantas Money’s offer of 100,000 frequent flyer points with the Qantas Money Home Loan.