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Cashback

Known as Cashback or a Cash Contribution.

A bank/lender may offer a cash incentive as part of a promotion or for retention purposes. There are no conditions on how this money is used, however it is generally a reimbursement for legal or valuation costs when purchasing a property as it is paid on settlement.

The amount of the contribution is negotiated at the same time of interest rates being confirmed. It is often reflective of the total loan amount taken, sometimes there will be a fixed amount on offer.

An offer letter from the Lender is required to be signed before the cash contribution is paid. This letter will state that if in the following 3 or 4 year period you refinance, sell the property (and all lending repaid) that the cash off may be requested back on settlement.

Each Bank has different terms on time frame of the 3 or 4 years, and often have a progressive scale of what is repaid.

The offer encourages longer term commitment with one bank.

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