this post was submitted on 21 Nov 2025
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Who's really paying for 'incredibly aggressive' cash back competition? (www.rnz.co.nz)
submitted 1 month ago by Dave@lemmy.nz to c/newzealand@lemmy.nz
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Home loan borrowers are paying the price as competition heats up with cash back deals, one broker says.

ANZ is offering a 1.5 percent cash back incentive to new loans, up to $30,000, until mid-December.

That is about twice the normal cash back that new home loan borrowers can get.

Cunningham said the cost to the banks meant that fixed-term home loan rates were about five or 10 basis points higher than they would be if the cash backs were not offered.

He said ANZ's cash back offer was the highest ever seen in the market by a huge margin.

"Anything above 1 percent is very unusual so that is incredibly aggressive.

"The flip side is that the fixed interest rates will be a bit higher than otherwise for all borrowers. Not really fair, but it's par for the course."

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[–] BaconWrappedEnigma@lemmy.nz 3 points 1 month ago (1 children)

That $30k is eaten away by inflation while the borrowers are also paying interest on it. At 4.49% that's $1347 per year. If the borrower doesn't spend it immediately, they are losing another 3% per year on it or $900.

[–] Venator@lemmy.nz 2 points 1 month ago

Initially I was thinking it might enable more people to get a first home, but I guess not really since they'll need more income to be able to service the loan since it results in interest rates being higher...