After months of fighting for market share through cash backs and reduced rate offers, banks are taking a step back from the mortgage wars.

In April Ubank ceased its cash back offer, which at one point was $6000, and the Commonwealth Bank will stop its $2000 cashback offer to new borrowers from June 1.

Instead of offering sweeteners to attract new customers, Westpac says it has been focusing on offering deep discounts to retain existing customers.

Westpac Chief Executive, Peter King, says as a result it has retained 84% of its borrowers who have been coming off fixed-term rates.

Milford Asset Management portfolio manager Jason Kururangi says a stop to cash back offers will be a “welcome relief to bank shareholders”.

“It’s a really good outcome for the market structure more broadly because it’s clear that some of the new business that banks are writing is uneconomic,” he says.

“Some of them have been bleeding market share.”