The Australian home refinance loan landscape has undergone a dramatic transformation in 2025. Where once more than 30 banks and lenders competed with attractive cashback offers, only 10 lenders now provide these incentives.
ANZ remains the sole major bank consistently offering $2,000 cashback for eligible refinancers.
This shift coincides with an 18% year-over-year increase in refinances through April 2025. Recent RBA cash rate cuts to 3.85% in May have created fresh opportunities for borrowers, but the incentive game has fundamentally changed.
The Great Cashback Withdrawal: Major Banks Change Strategy
The numbers tell a stark story. Westpac, NAB, and CommBank have all withdrawn their cashback offers as the 2023 financial year concluded. What was once a competitive battlefield of cash incentives has become a more measured approach to customer acquisition.
“Cashback home loans aren’t as common as before,” explains industry expert Mansour Soltani from Money.com.au. “That’s because lenders were not making money from them. They were essentially competing by luring customers with cashback offers, but failing to keep them long-term, as they’d refinance again when another cashback offer came along.”
- 2023: Westpac, NAB, and CommBank end cashback programs
- Early 2024: Smaller lenders begin reducing offer amounts
- 2025: Market stabilises with only 10 active cashback providers
High interest rates effectively killed the appeal of expensive customer acquisition strategies. When cash rates peaked, lenders could no longer justify spending thousands per customer on incentives that rarely generated long-term loyalty.
Why Lenders Are Moving Away from Cashback
The economics are straightforward. Banks discovered that customers attracted by cashback offers treated refinancing as a recurring opportunity rather than a permanent switch. This pattern created a costly cycle where lenders paid premiums for customers who would leave within 12–24 months for the next attractive offer.
Customer acquisition costs spiralled as lenders competed in what became an unsustainable cashback arms race. The profit margins simply couldn’t support the model when interest rates rose and lending volumes declined.
Rate Discounts Take Centre Stage in 2025
While cashback offers dwindle, a new incentive structure has emerged. Progressive rate discounts and ongoing benefits now dominate lender strategies. Companies like Unloan (backed by CommBank) and Athena Home Loans lead this trend with innovative discount structures.
Unloan offers rate discounts that increase over time. Borrowers receive an additional 0.01% discount annually, reaching a maximum 0.30% reduction. This creates long-term value that compounds unlike one-time cashback payments.
Athena Home Loans provides similar progressive benefits alongside fee-free structures. Industry analysis suggests borrowers could save up to $15,000 over a 30-year mortgage through eliminated fees alone.
Lender Type
Strategy
Typical Benefit
Major Banks
Selective cashback
$2,000–$3,000
Online Lenders
Rate discounts
0.10–0.30% ongoing
Regional Banks
Higher cashback
$3,000–$4,000
Credit Unions
Fee waivers
$500–$2,000 equivalent
The New Incentive Landscape
Fee waivers have become increasingly common as lenders seek cost-effective customer attraction methods. Many institutions now waive application fees, ongoing monthly charges, and even discharge fees for refinancing customers.
Package deals represent another evolution. Banks bundle home loans with offset accounts, credit cards, and transaction accounts for combined annual fees. This approach provides convenience while reducing individual product costs.
The shift toward ongoing benefits rather than upfront payments reflects a more sustainable business model. Lenders can offer meaningful savings without the immediate profit impact of large cashback payments.
What This Means for Australian Borrowers
The changing incentive structure creates both opportunities and challenges for those considering a. Understanding these shifts helps borrowers make smarter financial decisions.
Refinancing activity surged 18% year-over-year through April 2025, driven primarily by borrowers escaping high fixed rates locked in during 2022 and early 2023. Many of these borrowers face payment shocks as their fixed periods end.
The cost-benefit analysis has shifted significantly. Where borrowers once focused on maximising upfront cashback, the emphasis now falls on long-term interest savings and fee structures.
Consider this comparison: a $2,000 cashback offer versus a 0.25% ongoing rate discount on a $500,000 loan. The cashback provides immediate benefit, but the rate discount saves approximately $1,250 annually. Over five years, the rate discount delivers more than double the cashback value.
Winners and Losers in the New Market
Professional mortgage brokers now place greater importance on the total cost of ownership, reflecting a shift in the home refinance market. This change has created clear winners and losers.
Borrowers with strong credit histories and those refinancing from high fixed rates are in a strong position to negotiate lower interest rates and benefit from ongoing rate discounts. In contrast, individuals seeking quick cash or those who previously relied on cashback incentives, often with weaker credit profiles, are at a disadvantage.
The new landscape rewards long-term financial planning and discourages opportunistic refinancing driven solely by short-term gains.
Current Market Opportunities and Predictions
Despite the cashback reduction, significant opportunities remain. Regional Australia Bank currently offers the market’s highest cashback, reaching $4,000 for eligible borrowers with loans exceeding $750,000.
ANZ maintains its $2,000 cashback offer without specified end date, making it the most reliable major bank option. ME Bank provides tiered cashback reaching $4,000 for borrowers with loan-to-value ratios below 60%.
The remaining cashback landscape
Lender
Maximum Cashback
Minimum Loan
LVR Requirement
Regional Australia Bank
$4,000
$750,000
80%
ME Bank
$4,000
$250,000
60%
ANZ
$2,000
$250,000
80%
Police Bank
$4,000
$750,000
80%
Market predictions for the next 12 months suggest continued consolidation around rate-based incentives. As RBA cuts continue, more lenders may return to competitive cashback offers, but likely at lower amounts than historical peaks.
The trend toward digital-first lenders offering fee-free structures will accelerate. Traditional banks will focus on package deals and relationship banking benefits rather than standalone home loan incentives.
Strategic Takeaways for Borrowers
- Calculate total cost beyond headline offers. Compare five-year costs including interest rates, fees, and ongoing charges rather than focusing solely on upfront benefits.
- Consider your refinancing timeline. If you plan to stay with a lender long-term, ongoing rate discounts provide better value than one-time cashback payments.
- Negotiate beyond advertised rates. The reduced competition for cashback means lenders have more flexibility to offer personalised rate discounts, especially for borrowers with strong financial profiles.
Conclusion
The Australian home refinance loan market has matured beyond the cashback wars of previous years. While fewer immediate incentives exist, the shift toward sustainable, long-term benefits creates opportunities for informed borrowers.
Lenders like Empower Money now cater to this demand by offering tools such as their servicing calculator, helping borrowers assess their eligibility and long-term savings potential.
Current market conditions favour those who research thoroughly and negotiate actively. The most successful refinancing decisions will balance immediate needs with long-term financial goals, taking advantage of both remaining cashback offers and emerging rate discount structures.
As the market continues evolving, borrowers who understand these fundamental shifts will secure better outcomes than those chasing yesterday’s incentive models.
