lenders with the biggest incentives

Discussion in 'Loans & Mortgage Brokers' started by Switchtronics, 8th Jan, 2020.

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  1. Switchtronics

    Switchtronics Well-Known Member

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    I thought I could start a thread where we can track and monitor the incentives banks give to move you across.

    I always like to know what banks are offering to get new business and if I am getting a great deal.

    What's the best incentive you have received??
     
    Kelvin Cunnington likes this.
  2. Redom

    Redom Mortgage Broker Business Member

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    Currently the bigger lenders are hot on this and have been coming up with larger and larger offers:
    • NAB 4k refinance rebate
    • ANZ up to 3.5k
    • CBA 2k
    • Westpac group 2k per property (have seen some obtain above 10k!)
     
  3. Tofubiscuit

    Tofubiscuit Well-Known Member

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    So if someone had 5 properties that were valued at $250K each with LVR of 50% split across 5 loans. Would they still technically be able to receive $10K?
     
    Kelvin Cunnington likes this.
  4. Lindsay_W

    Lindsay_W Well-Known Member

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    No - Minimum $250K loan amount per property is required
     
  5. Tofubiscuit

    Tofubiscuit Well-Known Member

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    Still not a bad deal.
     
  6. Switchtronics

    Switchtronics Well-Known Member

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    Ive noticed these growing which is why I thought we could start a record. Obviously the incentive isn't the primary reason to switch but it helps if you are going to that bank anyway
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    None of this is really a good deal either. I saw some research suggesting that a $2k rebate costs the customer about 0.08% on their rate. Note that the second tier lenders aren't playing this game and their rates are generally 0.1% - 0.2% cheaper.

    These incentives are being advertised as to cover the cost of moving. If that were true they'd be limited to about $1k. Instead it's become a bribe to get new customers in a tight lending environment and a race to the bottom.

    How much of immediate effect this is having on customer rates is difficult to tell, but sooner or later someone is going to have to pay for this.

    Sure, cover the cost of moving. However lenders should be competing on rate, product and service. Not the size of a one off bribe.
     
  8. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    I am usally agianst the rebates as per above comments ^^ but horses for courses. I did a 4 loan / 4 property refi to Westpac settled in December clients will get $8K. Nice.
     
    [email protected] likes this.
  9. Redom

    Redom Mortgage Broker Business Member

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    The size and scope of rebates tells you a little about the mortgage market in general: bigger lenders losing 'new market share' and resorting to pricing techniques to win business. The aim of these techniques is largely to get people through the door and retain customers over the longer term to gain back revenue earned (if customers leave after a few months, banks are effectively coping losses on new business brought in with these rebates)

    This is probably more of a reflection of market dynamics today, vs say 10 years ago.

    % of new business going to majors has fallen relatively dramatically over this period, and in the short term too. There's been a lot of compliance/regulatory related change in the past 12-18 months. Larger banks respond like large ships to this change, while some of the smaller lenders are a bit more nimble and have adjusted process & policy to meet change better. ANZ, NAB, CBA etc would previously get loans approved with efficiency and speed...nowadays its much slower burn and SLA's/process a bit slower as a result.

    In short, competition is driving these rebates & large 'front end' discounting to attract customers. IMO with such large cost bases for the majors, competing so strongly on price metrics may not be a sustainable pathway to mortgage market share, but it may be enough to ride through their slowness at turning their big ships to more effective processes/service/etc.
     
    Peter_Tersteeg likes this.
  10. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Smacks of desperation to me. 15 years ago people paid application fees to get a mortgage. Now the banks pay you.
     
  11. albanga

    albanga Well-Known Member

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    On a standard size mortgage and mortgage term (3-4 years) you are still well in front on a NAB 4K cashback though.

    .08 is $250 annually.
     
  12. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The equation changes a bit when you consider it's 0.08% they may not pass on in the next rate cut though. The individual receiving the $4k is ahead, but they're only a small percentage of the banks customers.
     
  13. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    we have had more than one enquiry in recent times on churn for the pork barrel every 6 mths :)

    ta
    rolf
     
  14. Morgs

    Morgs Well-Known Member Business Member

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    Westpac now offering $3K per security..... I can see this one being very popular now :)
     
  15. Shazz@

    [email protected] Well-Known Member

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    Bumping this thread.

    What’s the latest on the banks giving incentives?
    Have the incentives slowed down?
     
  16. Hockey Monkey

    Hockey Monkey Well-Known Member

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  17. Manish1

    Manish1 Active Member

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    Hi Redom
    Is there any link on cashback offer of NAB that you can share?
     
  18. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    NAB ended their cash back offer several months ago.
     
  19. Manish1

    Manish1 Active Member

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    Thanks Peter.
     

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