Lender's cashback on new purchase.

Discussion in 'Loans & Mortgage Brokers' started by property_geek, 1st Jul, 2020.

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  1. property_geek

    property_geek Well-Known Member

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    Hi

    Is there any lender (except newcastle permanent) offering cashback on new purchase ? I know there are plenty of cashback offers on re-finance deals but my question is about new purchase.
     
    property_geek, 1st Jul, 2020
    #1
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Paul@PAS, 1st Jul, 2020
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  3. Lindsay_W

    Lindsay_W Well-Known Member

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    Yes there are a few that offer for purchases, your broker should be able to advise you
     
    Last edited: 1st Jul, 2020
    Lindsay_W, 1st Jul, 2020
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  4. MC1

    MC1 Well-Known Member

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    MC1, 1st Jul, 2020
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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Because price for many in our industry is all their primary differentiation......... slippery slope that one.

    Ta
    rolf
     
    Rolf Latham, 1st Jul, 2020
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  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I wasnt asking the question as much as my observation that this question is often asked by people who also want a broker to assist them. There actually may be serious flaws in credit advice that is limited to a cashback deal. Just because a lender will cashback doesnt make it the best loan. Throwing in a broker that is happy to split part of their fee may be conflicted advice.

    What do brokers think of that view - Its probably more a concern now than ever.
     
    Paul@PAS, 3rd Jul, 2020
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  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    My opinion is that cash back offers generates bad behaviour in all parties. Broker, lender and borrower are all more likely to do things badly because of cash back offers:

    *** Borrowers may want to refinance loans for a few $$$ with no regard to actual needs or goals.
    *** Brokers will deliberately structure loans to block borrowers from refinancing because we don't want to see a claw back.
    *** Lenders are focusing only on new business at the expense of existing customers (nothing new here, but the gap has definitely widened since the cash back offers came into play).

    Cash back offers appear to look good because it removes the barrier to switching to a better deal. Hence you don't see consumer groups or regulators taking issue with them.

    A better solution would be to limit cash back offers to the borrowers actual switching costs, then let lenders compete on service and product, not bribes.
     
    Peter_Tersteeg, 3rd Jul, 2020
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  8. MC1

    MC1 Well-Known Member

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    Best thing would be if all lenders went back to same discounts like they used in the old days with the 0.7
    Then it would come down to policy and service
     
    MC1, 3rd Jul, 2020
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  9. property_geek

    property_geek Well-Known Member

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    I am not sure why my question was interpreted in a very different way.
    I asked only about the lender's rebate on purchase deals. My sister is looking to purchase a property and would prefer to go lender that's offering bachback (considering all goals and requirements are met and interest rate/fee are same.)

    I am not sure if there is such thing as "broker cashback" exists. But as a borrower I wouldn't mind receiving some extra cash :D
     
    property_geek, 4th Jul, 2020
    #9