Cuts to cash-back offers

Banks have begun to reduce cash-back offers on home loans in the wake of the Covid-19 crisis, advisers have told TMM Online.

Advisers report that some of the big four banks have cut their cash incentives on home loans as the covid-19 financial crisis takes hold.

Westpac and BNZ are among the banks said to have cut cash incentives to as little as 0.4% in recent weeks, one adviser told TMM Online.

The adviser reported BNZ's mobile banking service offering $10,000 cash-back, but just $5,400 through the broker unit. 

"The BNZ mobile is at .78% and the BNZ unit is .42%," the adviser said.

Another broker said they had also experienced changes from Westpac and BNZ in recent weeks.

When asked for comment on cash incentive changes, Westpac said: “Mortgage offers to customers are based on their individual lending circumstances. We make cash offers on a case-by-case basis to cover costs associated with buying a home, such as legal fees.”

BNZ said: "New Zealand benefits from an extremely competitive home loan market and we make pricing decisions to account for that. We’ve passed through the full Official Cash Rate cut to our floating home loans and are offering incredibly low interest rates on our fixed mortgages."

Advisers expect lenders to make changes to adviser commission if they need to cut costs.

"It's highly likely banks will start looking at where they can cut costs," one adviser told TMM Online. "I would imagine adjustments to broker commissions wouldn't be far away, as they changed commissions back in the GFC days."

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