By Steve Chin - June 2026 - 5 min read
Cashback offers are a marketing tool lenders use to attract new borrowers, particularly refinancers. Offers typically range from $2,000 to $10,000, with some going higher for larger loans. The money is real - it lands in your account after settlement - but whether it is a good deal depends on the overall package.
A cashback is worth taking when the lender is also offering a competitive rate. In this case, the cashback is a bonus on top of a loan that would already save you money. It effectively covers your switching costs (discharge fees, settlement fees) and puts extra money in your pocket.
Cashbacks are particularly valuable when refinancing because they offset the one-off costs of switching, making the decision to move almost risk-free.
Some lenders use cashbacks to disguise an uncompetitive rate. A $4,000 cashback sounds great, but if the rate is 0.15% higher than the best available, on a $500,000 loan that costs you roughly $750 per year - meaning the cashback is eaten up in about 5 years, and after that you are paying more.
The rule of thumb: always compare the total cost over 3-5 years, including the cashback. A lower rate with no cashback will often beat a higher rate with a cashback over any meaningful time horizon.
Lendology compares the total cost - rate, fees, and cashback - across 60+ lenders so you see the real picture. Book a free chat and we will show you whether the cashback you are looking at is a genuine saving or a marketing play.
When you refinance or take out a new loan with a participating lender, they pay you a lump sum - typically $2,000 to $10,000 - after settlement. The cashback is usually paid into your loan account or nominated bank account within 60-90 days of settlement. Some lenders have minimum loan amounts or other conditions.
Cashback offers on owner-occupied loans are generally not considered taxable income. However, cashbacks on investment property loans may be treated differently. Check with your accountant for your specific situation.
Sometimes, but not always. Some lenders use cashbacks to offset a slightly higher rate. The cashback looks attractive upfront but costs you more over the life of the loan. Other lenders offer genuine cashbacks on already-competitive rates. Lendology compares the total cost over 3-5 years so you can see the real picture.