How do refinance cashback offers work, and are they worth it?

Cashback offers are designed to grab your attention, and they do. But a cashback is only part of the picture, and chasing one without looking at the loan behind it can cost you more than you receive. Here is how they work and how to judge whether one is worth it.

What a cashback is

A cashback is a lump sum a lender pays you as an incentive to take out a new loan with them or refinance an existing one to them. It is usually paid after settlement, either as cash or credited against your loan. Lenders use them to win your business in a competitive market.

The state of cashbacks in 2026

Cashback offers come and go, and there are fewer around than at their peak a few years ago. As at 2026 a handful of lenders still offer them, typically a few thousand dollars on a qualifying refinance, alongside some offers in the form of points or gift cards. Because offers change frequently, any list dates quickly, so check what is current.

The conditions to watch

Cashbacks come with conditions. Common ones include a minimum loan size, a maximum loan to value ratio such as 80 per cent, a requirement to settle within a set window, and limits on which loan types or purposes qualify. If you do not meet the conditions, you do not get the cashback.

The catch: rate over cashback

This is the key point. A one off cashback is small compared with the interest you pay over the life of a loan. A loan with a cashback but a slightly higher rate can cost you more over a few years than a loan with no cashback and a lower rate. Always compare the comparison rate and fees over the full term, not just the cash on offer.

Watch for clawback

Some cashback offers require you to repay the cashback if you refinance away or discharge the loan within a set period, often a couple of years. So if you take a cashback and then switch again soon after, you may have to hand it back. Read the conditions before you rely on the money.

Points and gift cards too

Not all incentives are cash. Some lenders offer frequent flyer points or gift cards instead, which can be worth a similar amount but are less flexible. Treat these the same way: a nice extra, but secondary to the rate and fees of the underlying loan.

When a cashback is worth it

A cashback is genuinely worth it when the loan is competitive on rate and fees in its own right, and the cashback is a bonus on top. In that case it can help offset switching costs such as discharge and application fees. The cashback should be the cherry, not the reason.

How to weigh it up

The sensible approach is to compare loans on their total cost over the term first, then treat any cashback as a tie breaker or a bonus. A broker can compare the real cost across lenders, including any current cashback, so you do not end up paying for a short term sweetener with years of a higher rate.