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Bankwest has confirmed that it will stop offering cashbacks with its mortgage products from 31 May 2023.
Currently, the Western Australia-based lender offers $2,000 to borrowers when they refinance to Bankwest (though mortgages must be disbursed by 31 August 2023, with a minimum loan amount of $250,000).
However, this offer will be removed for refinance applications from 31 May 2023.
In a statement provided to Mortgage Business, a spokesperson for Bankwest commented: “Bankwest is committed to being a simple, easy bank for the Australian home owner of today and tomorrow.
“In response to the current economic environment, customer and industry feedback, we are removing the cashback offer from the market from 31 May 2023.
“We know our brilliant Bankwest colleagues will continue to deliver the best possible experience to customers, as they support more home owners in achieving their goal.”
While the bank said it would be removing its cashback incentive, it emphasised that it would “continue to offer customers a range of competitive products”.
Bankwest’s spokesperson suggested that customers looking for the right home loan for their unique needs should speak to their broker, message the bank via the Bankwest app, speak to one of its home lending specialists, or visit its website.
The news followed on from the move by its parent company, the Commonwealth Bank of Australia (CBA), which revealed earlier this week that it would be pulling cashbacks from market at the end of the month.
The move from the banking group came after CBA chief executive Matt Comyn suggested that the strong competition for refinances has resulted in lenders writing loans below the cost of capital.
Members of the mortgage broking industry have welcomed the move to remove cashbacks, after finding that the large dollar value incentives were encouraging more borrowers to refinance — sometimes against their longer-term best interests.
According to broker industry representatives, this ‘sugar hit’ had resulted in some borrowers refinancing multiple times in a 12-month period and had resulted in a spike of clawbacks for brokers.
Large cashback offers put into market by the major banks have also contributed to the big four regaining market share — with recent data from Australian Finance Group revealing that more than 60 per cent of AFG mortgages were lodged with the big four banks in 3Q23.