It has been common for banks to offer thousands of dollars to entice new customers.
But that is now changing as pressure goes on bank funding.
Sovereign now offers no cash with deals. ASB will only offer $750 maximum on investment loans.
Brokers said it has a “black and white” matrix to determine what it will offer on residential lending – although it was not willing to release it. If there is no new security, there is no cash available.
An ASB spokeswoman would only say: “We continue to assess each application on a case-by-case basis and encourage customers to talk to us so we can tailor a home loan solution that meets their needs.”
Westpac said it was still offering cashbacks. ANZ said: “While we have no formal cashback offer in the market, in some circumstances, and as part of an overall home loan offer, we will negotiate a cash contribution for some home loan customers.”
Ajay Kumar, of Global Financial Services, said he expected to see little or no cashbacks on offer this year.
Adviser Glen McLeod said cashbacks had become more and more generous over recent years. While it used to be common to get $1500 to cover legal fees, for example, he said last year competition had pushed banks to the point where they had been willing to offer a $20,000 carrot to get valuable business.
He said that seemed unlikely now and banks were also expecting more loyalty in return for their cashback offers. BNZ requires customers who get a cashback to lock in for four years and there is a clawback on the cashback if they move within that time.
“I don’t have a problem with that as long as there is consistency with interest rates,” he said. “If interest rates are lifting, potentially the need for cashbacks to move is not so much there. If interest rates have increased from when you locked in there might not be a break fee to pay.”
Small players TSB and SBS now appear comparatively generous with their cashback offers, brokers said.
