Nearly half a million borrowers plan to refinance, and cashbacks are back. How to tell if switching is actually worth it

Almost a quarter of mortgage holders have either switched lenders in the past year or say they plan to in the next one, and lenders have noticed. Cashbacks of $2,000 to $4,000 are once again a prominent feature of the market. But the cash is usually the least important number on the page. Here's what the latest figures show, how to weigh a cashback against the rate, and the checks worth doing before you switch.

Why so many borrowers are shopping around

The cash rate is 4.60% after the Reserve Bank's September increase, its fourth rise of 2026, and repayments are biting. Finder's research, reported by realestate.com.au on 19 October, found that 14% of mortgage holders plan to refinance with a different lender in the next 12 months. Finder says that's equivalent to about 462,000 people. A further 9% have already switched in the past 12 months, so almost a quarter (23%) have either recently moved or plan to.

The pressure shows up elsewhere in the same research. More than one in three mortgage holders (34%) told Finder's Consumer Sentiment Tracker they struggled to pay their home loan in September. Almost half (48%) have no plans to refinance.

Finder's money and home loans expert Richard Whitten said borrowers were looking for relief:

“Your home loan is one of the biggest expenses, so even a small improvement in your rate or fees can make a meaningful difference over time.”

The broker market is seeing it too. Loan Market, which the Australian Financial Review describes as the country's largest mortgage broker group, says borrowers are refinancing at a pace not seen since the peak of the fixed-rate cliff in 2023, when many cheap fixed-rate loans rolled onto much higher variable rates.

Busy, but not easy for everyone

Not every measure points the same way. Finder notes refinancing is lower than a year ago, even though it now makes up 60 to 65% of mortgage sales, compared with about 35% historically. Equifax data for September showed overall mortgage demand down 19.2% on a year earlier, according to The Adviser, and applications to switch lenders down 8.8%, as we covered in our 18 October article.

These figures measure different things. Fewer people are buying, so refinancing is a bigger share of a smaller market. The takeaway is simple: plenty of borrowers are asking whether their loan still stacks up, and lenders are competing for the ones who can move.

Cashbacks are back

The Adviser reported on 20 October that cashbacks, “commonly worth $2,000–$4,000”, are being offered to borrowers who refinance or take out an eligible purchase loan. Finance Brokers Association of Australia (FBAA) chief executive Leo Gagic said:

“Cashback offers and other incentives have once again become a prominent feature of the lending landscape.”

The FBAA's concern is that some offers are only available depending on how a borrower approaches the lender, for example online or direct rather than through a broker. That's an industry debate, but it has a practical side for borrowers: it's worth checking whether an offer depends on how or where you apply.

Finder's cashback guide (updated 8 September) says cashbacks generally range from $1,000 to $4,000, that lenders often require a minimum loan of about $250,000 and a loan-to-value ratio (LVR) of 80% or less, and that most offers are aimed at refinancers. Offers change often and come with conditions, so we haven't listed specific deals here. Check the details on the lender's own website, or ask us to.

One point of confusion to clear up: some lenders use “cashback” as a brand name for redraw, as Suncorp does with its Cashback/redraw (see our 19 October article). In this article, cashback means a one-off cash payment for taking out or moving a loan.

Rate versus cashback: a quick example

A cashback is paid once, usually after settlement. The interest rate and fees apply every month for as long as you have the loan. That's why a small difference in rate can outweigh a cash payment surprisingly quickly.

Finder's figures show that on a $500,000 loan over 30 years, a difference of just 0.5 percentage points adds up to more than $58,000 over the life of the loan. We checked the arithmetic: at 6.00% the monthly repayment is about $2,998, and at 6.50% it's about $3,160. That's roughly $163 a month, or about $58,500 over 30 years if nothing else changes.

Here's how that plays out against a $3,000 cashback, using the same $500,000, 30-year principal-and-interest loan and a starting rate of 6.09%:

Loanworth calculation, rounded, based on the difference in monthly principal-and-interest repayments from a starting rate of 6.09% p.a. Ignores fees, switching costs and future rate changes. Example only, not a quote from any lender.

The flip side matters too. If a lender offering a cashback also has a competitive rate and similar fees, the cashback can be a genuine bonus that helps cover the cost of switching. Cashbacks aren't bad; they're just worth comparing last, not first.

Before you switch, check these

Compare the rate and fees first

Look at the interest rate, the comparison rate and any ongoing fees, such as an annual package fee. The comparison rate rolls most fees into one figure. Our 10 October article explains how it works and its limits.

Count the cost of switching

Moving lenders can involve a discharge fee from your current lender, government fees to register and discharge the mortgage, and any application or valuation fees with the new one. If you're on a fixed rate, ask your lender for a break cost estimate, which can be significant. A cashback may cover some or all of these costs, but it's worth adding them up rather than assuming.

Read the cashback conditions

Typical conditions include a minimum loan size, a maximum LVR, deadlines to apply and settle, and sometimes a requirement to apply online. Finder says the payment usually lands 30 to 120 days after settlement, and that some lenders include clawback clauses requiring you to repay the cashback if you leave within one or two years. Check the full terms before you rely on the money.

Watch the loan term

If you've paid a loan down for several years and refinance onto a new 30-year term, your repayments may fall, but you could pay more interest overall. It's worth asking for repayments based on your remaining term, or keeping your repayments at the current level, if that suits your budget.

Don't lose features you use

Offset accounts, redraw, split loans and how extra repayments are treated all vary between lenders. If you rely on an offset account, or you've built up a buffer in redraw, check how the new loan handles it. Our Resources page on offset vs redraw explains the difference.

Make sure you can pass the test

A new lender will assess your application from scratch. Lenders generally test whether you could afford repayments at a rate at least 3 percentage points above the loan's rate, under APRA's serviceability buffer. If your income, expenses or debts have changed since you took out your loan, it's worth checking your borrowing capacity before you apply. Our 18 October article explains why this is catching some borrowers out.

Ask your current lender first

With this much competition for borrowers, asking your current lender for a better rate is free and quick. Have a recent comparison to hand and ask what they can offer. The Adviser also reports that at least one major bank has confirmed it makes discretionary cash payments and discounts to some customers who are looking to leave. If your lender won't move, you've lost nothing, and you'll know what you're comparing against.

If serviceability rules out switching for now, a repricing request and a review of your fees are still worth doing.

Is it worth waiting for the RBA?

The Reserve Bank's next decision is on Tuesday 3 November. Refinancing usually takes a few weeks, so there's no need to wait for the decision before you start comparing. Whatever the RBA does, it's the gap between your rate and other lenders' rates that drives the value of a switch.

If you're struggling, talk to your lender early

If repayments are already hard to meet, contact your lender as early as you can and ask about hardship options. The free National Debt Helpline is on 1800 007 007.

Key dates

• Wednesday 21 October, 8:15am Adelaide time: RBA Deputy Governor Andrew Hauser, fireside chat at Citi's Australia & New Zealand Investment Conference.
• Wednesday 28 October, 11:00am Adelaide time: ABS Consumer Price Index, September 2026.
• Tuesday 3 November, 2:00pm Adelaide time: RBA decision. The cash rate is currently 4.60%.

Related reading

• The September rate rise has now reached almost every home loan, and switching lenders is getting harder (18 October)
• Advertised rate or comparison rate? (10 October)
• Suncorp borrowers could see minimum repayments jump when their loans move to ANZ (19 October)

Sources: realestate.com.au, Aleisha Dawson, “Almost 500,000 mortgage holders plan to refinance as interest rates reach 15-year high”, 19 October 2026 (Finder research: 14% / 462,000, 9%, 23%, 48%, 34%, 60 to 65% of mortgage sales vs about 35%, $58,000 example, Richard Whitten). Australian Financial Review, James Eyers, “Mortgage holders rush to refinance amid rising rates, property slump”, 19 October 2026 (Loan Market). The Adviser, Charlie Tchetchenian, “Banks put on notice for stoking channel conflict amid downturn”, 20 October 2026 (cashback range, Leo Gagic, Equifax mortgage demand, retention payments). Finder, “Cashback Home Loan Offers 2026”, updated 8 September 2026 (cashback range and typical conditions, payment timing, clawbacks, loan term). RatesBoard, rates as at 20 October 2026 (6.09% starting rate used in the example). Reserve Bank of Australia, cash rate target (4.60%) and calendar. Australian Bureau of Statistics, Consumer Price Index release calendar (next release 28 October 2026). Loanworth calculations are rounded and for illustration only.

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