Mortgage Cashback Offers: Are They Really a Good Deal?
If you’ve been researching home loans in New Zealand, you’ve probably seen banks advertising mortgage cashback offers — sometimes worth thousands of dollars. For first-home buyers especially, a cashback can feel like a welcome boost to help cover legal fees, moving costs, or furniture.
But are mortgage cashback offers really a good deal — or is there more to consider?
Let’s break it down.
What Is a Mortgage Cashback?
A mortgage cashback (sometimes called a home loan contribution) is a lump sum paid by the bank to you after your loan settles. It’s usually calculated as a percentage of your loan amount — often around 0.6% to 1.0% of the mortgage.
For example:
A $600,000 mortgage with a 0.8% cashback = $4,800 paid to you
That money can be used for anything — legal fees, renovations, appliances, or simply boosting your savings buffer.
Why Do Banks Offer Cashback Deals?
Cashback offers are designed to attract new customers — especially those refinancing or taking out a new mortgage. It’s a competitive tool used by banks to win your business.
However, there’s always a trade-off.
The Catch: Clawback Periods
Most cashback offers come with a clawback period, usually between 3 and 5 years. This means:
If you refinance, repay your mortgage early, or switch banks during that period
You may have to repay some (or all) of the cashback
For example, if you receive a $5,000 cashback and refinance after two years of a five-year clawback, you could be required to repay a portion of it.
This is important if you’re planning to upgrade homes, restructure loans, or refinance soon.
Are Cashback Offers Worth It?
The answer depends on your situation.
Cashback Can Be a Good Deal If:
You plan to stay with the lender long term
The interest rate is still competitive
The loan structure suits your goals
You need upfront funds to ease settlement costs
Cashback May Not Be Ideal If:
The interest rate is higher than alternatives
You expect to refinance within a few years
You’re choosing the bank only for the cashback
Even a slightly higher interest rate can cost more over time than the cashback gives you upfront.
Don’t Focus on Cashback Alone
It’s easy to get drawn to a large cashback number — but it should never be the only factor in choosing a mortgage.
You should compare:
Interest rates (fixed and floating)
Loan flexibility
Break fees
Repayment options
Offset or revolving credit features
Sometimes a slightly smaller cashback with a better rate can save significantly more over the life of the loan.
How a Mortgage Adviser Helps
A mortgage adviser can compare cashback offers across multiple lenders and calculate the true long-term cost. They can also explain clawback clauses clearly — something many borrowers overlook.
Because the best mortgage isn’t the one with the biggest cheque on day one — it’s the one that supports your financial goals over the next 20–30 years.
Final Thoughts
Mortgage cashback offers in NZ can absolutely be a good deal — if the overall loan structure and interest rate still make sense. Just make sure you’re looking beyond the headline number.
Before signing anything, understand the conditions, compare total costs, and choose the loan that works for your future — not just your move-in weekend.