How to refinance a fully offset mortgage / mortgage with full amount in redraw

Hi all,

For mortgages which are fully offset or have full amount of funds in redraw resulting in a loan outstanding figure of 0; for discussion sake, say mortgage = 600k; funds in offset = 600k,
or mortgage limit = 600k; funds in redraw = 600k,

1) Would withdrawing a large amount - say 250k - and putting it into a share trading account be good enough to getting cashback offers + refinance?

2) What else can be done for a new lender to be interested to take on refinancing + cashback?

3) Would being in a mortgage structure with an offset instead of redraw provide a different outcome with (1) and (2) above?

Thank you.

 

Thanks Rolf.
I do understand it's not the best deal for the lender!

 

What the purpose of refinancing? Is your current rate too high?

In you're scenario above taking $250K out of redraw to invest, you would pay approx $7K per annum in interest for a couple of grand cash back one off payment. Unless you're significantly reducing your interest rate as part of the refinance I wouldn't think it's worth it.
Structured correctly and with the $250K invested wisely maybe you would have a good outcome - but I wouldn't just do it for the cashback.

 

The cash back would be the main driver, with the 250k used for short term share trading so the funds may be in/out of the offset/redraw depending on how the markets go, so hopefully that goes some ways in reducing actual interest paid.

 

Personally I don't think it's a good reason to refinance just for a cash back, each to their own of course.
Which lender are you considering? If Westpac or St George or ANZ it's a processing nightmare at the moment.
But to answer your question, most require an outstanding balance of at least $250K to qualify for the cash back offers, some less.

 

I totally hear what you are saying. Ironically I am looking to refi OUT from the Westpac group (one of their brands) as I have been having a hard time with delays in funds appearing in accounts when transferred locally.

I have not decided on which lender (I appreciate your heads up on ANZ!) as still researching at the moment. Cashback is front of mind as I figured since I'm moving bank I might as well make it worth my while!

On the 250k outstanding loan balance, does the lender generally require that balance to exist for a minimum amount of time?

 

St George and ANZ has $4k and $3k rebate respectively which currently has a 15 business day turn around time.

Your refinance cost + annual fee would cost you around $1200 -$1300 If youre based in NSW. Therefore youre pocketing anywhere between $1800 -$2800.

If your loan is 100% offset, I don't think youre short of a quid and this shouldn't be the main driver to refinance, but it's totally up to the owner.

You dont need to have a $250k net balance to get the rebate, I recently did one with St G with a net balance of $160k and received it.

 

Thanks Tony.

Ideally, I would like to refi with cashback on 0 net balance; and then use XXX amount for share purchases when required, but was given the impression that lenders won't consider 0 net balances (and for good reason).

 

The refinance rebates aren't in writing anywhere on documents from the banks. Are they meant to be in writing or can you just take the broker's word (and the banner on the bank website) for it? Not refinancing just for rebates but less likely to move if they aren't at least absorbing my costs!

 

The T&Cs are all published on the lender websites, if you were concerned you could print them off I suppose?