In New Zealand, mortgage cashback offers can provide several benefits to borrowers. Whilst the overall interest rate may be a bit higher there is often a great reason to consider cashback deals when you are looking for a mortgage or to re-finance your current borrowing.
Some of the advantages of mortgage cashback include:
Extra funds for expenses:
Cashback provides borrowers with additional funds that can be used for various purposes. Whether it's covering moving costs, home renovations, or purchasing furniture and appliances, the cashback can help alleviate the financial burden associated with these expenses. If you are looking to save further on your expenses then use a site like PriceMe to help compare appliances, televisions, even kitchen cooktops!
Boosting savings or emergency fund:
Cashback can be used to bolster savings or establish an emergency fund. By setting aside the cashback amount, borrowers can create a safety net for unexpected circumstances or future financial goals. There are lots of reasons to try and save up an emergency fund - be sure to budget well and see what you can save. Try our budget calculator.
Lower initial costs:
Mortgage cashback can reduce the initial costs associated with purchasing a property. It can help offset some of the upfront expenses, such as legal fees, valuation costs, or other settlement-related charges.
Debt reduction:
Borrowers have the option to use the cashback to make additional repayments towards their mortgage. By reducing the principal amount, borrowers can potentially decrease the overall interest paid over the life of the loan and shorten the mortgage term.
Flexibility and choice:
Mortgage cashback offers provide borrowers with flexibility and choice in managing their finances. The cashback amount is typically unrestricted, allowing borrowers to allocate it based on their individual needs and priorities.
Incentives for switching lenders:
Cashback offers can be utilized as an incentive to attract borrowers from other lenders. Banks and Non Bank Lenders may offer competitive cashback rates to entice customers to refinance their mortgages, potentially leading to savings on interest rates or other loan terms.
It's important for borrowers to carefully consider their financial situation and goals before deciding how to utilize the cashback amount. Consulting with a mortgage advisor or financial professional can provide valuable guidance in making the most suitable financial decisions based on individual circumstances.
