Churning Home Loans / Mortgages for Cash Back Deals

Ozb101 on 26/01/2023 - 08:35

Is it possible or has anyone successfully churned home loan for cash back deals offered by banks etc.

If the cost to refinance, such as application fees and fees to exit, are less than the cash back, could you not slowly pay off your mortgage.

For example:
Cash back might be $4000
Refinance costs could be $1500
Left over to put back into mortgage is $2500

Repeat this with other casback offers.

I guess the only thing stopping you could be banks saying your not eligible the second time around.

Financial Home Loan

Comments

  • Trying2SaveABuck on 26/01/2023 - 08:43
    +4

    you can 'do this' normally they 'cashback' takes a period of time to kick in it 3-6mo but it certainly is something i know others have done so

    it might impact your ability to borrow from the same lenders in the future and any of there affiliates

    the biggest issue is if you cannot refinance and get stuck with a terrible lender with a bad rate but otherwise go for it man

  • 87percent on 26/01/2023 - 08:54

    Isn’t multiple credit checks bad?

  • Skramit on 26/01/2023 - 09:10

    Yes I have a friend who churns as often as he can for the cashbacks eg every 3 months or so. He has a low LVR, high income etc. so banks are happy to loan to him. Prertty sure he's knocked about 20k off his loan over a couple of years, plus all the saved interest of paying it off earlier. Uses a broker so its not a huge hassle in paper work each time.

    • bloom on 26/01/2023 - 11:56
      +4

      I doubt he's using a broker, their commission is clawed back if you refinance within 2 years (depends on bank)

      • dcep on 26/01/2023 - 12:00

        Uses a broker so its not a huge hassle in paper work each time.

        He stays with the same broker. As long as the churn is nett +ve to the broker, he doesn't care?

        • djkelly69 on 26/01/2023 - 16:12

          Same broker arranges loan, settles, it gets refinanced within 2 years, so all of broker's commission for that loan gets clawed back by the bank (as I understand it).

          Rinse repeat.

          So what is in it for the broker? He seems to be working for nothing.

    • Stopback on 26/01/2023 - 15:55

      Def doesn't live in Queensland. Need a justice of peace every damn time.

  • Muzeeb on 26/01/2023 - 09:33
    +2

    dupe

    • Ozb101 on 26/01/2023 - 10:24

      Thanks @Muzeeb

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