Banks have reintroduced cash-back deals for borrowers in a bid to capture more market share.

These offers gained popularity in 2023, leading to intense competition where some banks were issuing loans at rates below their cost of capital.

Although such offers dwindled by the end of 2023, they have now made a comeback, with several of Australia’s largest banks providing significant cash incentives.

Jeff Cai, an analyst with investment and advisory firm Jarden, notes that major banks now have the flexibility to offer cash incentives for home loans.

“Banks are competitive in their discounting strategies and are selectively providing cash-back offers to retain existing customers amid a strong focus on customer retention,” he explains.

Canstar data director Sally Tindall highlights that the mortgage market remains highly competitive.

She advises that for existing borrowers, this is an opportune time to negotiate with their banks to secure better deals.