Does a refinance cashback make the loan worthwhile?
A refinance cashback improves the initial cost of switching only if you qualify and receive it. Compare the loan with and without the credit, using the same balance, remaining term and holding period. A higher rate or ongoing fee can consume the benefit over time. Check the actual promotion terms for eligibility, deadlines, payment timing and any repayment conditions before including the amount in your decision.
By Ratey · General information for Australian borrowers.
Example: a credit versus an annual cost difference
Assume two hypothetical offers have the same rate, term, balance and upfront fees. Offer A provides a $2,000 cashback but charges $400 more each year than offer B. Ignoring timing and the time value of money, A is $800 ahead after three years: $2,000 less three annual charges of $400.
At five years the extra fees equal the credit. After that, B is cheaper if everything remains unchanged. If A also has a higher interest rate, the advantage can disappear sooner; use repayment schedules to calculate that case. These are invented figures, not a statement about a current lender promotion.
Run the offer with cashback set to zero first
Use the quoted rate and all applicable fees to calculate the cost of the loan without the promotion. Then add the confirmed cashback and compare the change. This reveals whether the loan suits your plans on its ongoing terms and how much your decision depends on receiving the credit.
For a comparison between two new offers, run each against the same existing loan and horizon. Keep the rate, fees and cashback attached to their own offer. Mixing the cheapest rate from one product with the largest credit from another creates a loan you cannot actually obtain.
Read eligibility as a checklist
Check the lender’s actual terms rather than relying on the amount displayed in an advertisement. Write down what counts as an eligible application and settlement, whether your loan purpose and product qualify, and how the loan amount or LVR is measured. Ask about previous-customer exclusions and whether all borrowers must meet a condition.
As a historical illustration, ANZ’s published switching terms for applications ending 30 September 2025 included application dates, eligible loan purposes, LVR conditions and a receiving-account requirement. That document demonstrates why the details matter; it is an expired offer and is not evidence of an offer available now. Use the terms for the offer you are actually considering.
| Question | Evidence to keep |
|---|---|
| Am I eligible? | Written terms and confirmation of any unclear condition |
| What are the deadlines? | Application and settlement dates, if specified |
| When is payment due? | Payment trigger and stated processing period |
| Where is it paid? | Required account and account-holder details |
| Could it be reclaimed? | Any retention, repayment or cancellation clause |
Budget for the gap before payment
An expected credit and available settlement cash are different things. Put the full switching costs in your cash budget, then add the cashback on the expected receipt date. If that date is uncertain, keep a buffer rather than spending the future payment in advance.
The Ratey calculator simplifies cashback as an upfront credit and does not model a delayed payment date. Its cost-recovery result therefore needs that timing caveat. Keep cashback at zero until you have a supported figure, and do not use an estimated credit to conceal an unresolved fee.
Check whether the advantage lasts
Use your expected holding period and a longer one. A credit can make one offer cheaper at the start while another catches up through a lower ongoing cost. Compare interest and fees over both periods and check balances if the repayment schedules differ.
Keep the comparison current while you arrange the refinance. If the written rate, package fee or qualifying conditions change, rerun it. A saved advertisement cannot settle a question about the final contract. The broad rate-comparison guide covers matching product features across your shortlist.
Your next-step checklist
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Common questions
Is cashback the same as a lower interest rate?
No. Cashback is a one-off credit; a rate difference affects interest while the loan remains outstanding. Compare the combined dollar cost over your intended holding period.
Does the calculator tell me which cashback offers exist?
No. It models an amount you supply. Verify an offer directly with its lender and use zero where eligibility or availability is unresolved.
Should I refinance repeatedly for bonuses?
Each switch needs its own cost and eligibility assessment. Count the fees, application work, timing and conditions every time; do not assume a previous result repeats.
Sources and assumptions
These primary sources support the explanations above. Examples use invented figures to show the calculation or decision; they are not available loan offers. Check your lender’s terms for your circumstances.
Calculations are estimates and do not establish borrowing eligibility. Read the calculation methodology.
Measure the promotion’s contribution
Compare the same refinance scenario with cashback set to zero and with the confirmed amount.