Cash Back Offers

Are cashback offers worth it?

There have been a lot of banks offering a lot of different cash back offers anywhere between $2000 & $6000 to refinance to them. Its very exciting and enticing.

However, we need to understand what’s most important to us and what we’re trying to achieve at this point in time. If we are just refinancing to get the cash back, first and foremost we need to ask the following quesions. Will it help us achieve the goals we initially set? What will repayments look like on the new loan at the new rate? And how does that look when we are starting again on a the 30 year term?

We have to remember when we are refinancing we are actually extending the loan term in most cases. So if we’ve been paying off our loan for 10 years and we still have 20 years left and we refinance, we start from scratch. We actually need to weigh up the interest over the new loan term and see if you end up paying more or less in  interest in comparison to the cashback offer we will receive.

So when you look at refinancing, think about your goal, what you’re trying to achieve and can that be achieved with the existing lender because existing lenders will negotiate on rates, especially during this time.

So have a conversation with your broker about what your goals are, and whether refinancing and taking advantage of these cash back offers is actually going to help you achieve your financial goal, even faster. In some cases it may, in others it might not.

The Growfinity team.