Cash backs creep up

Advisers report that ANZ and Westpac have lifted cash back offers back to .6% after cutting them during the lockdown. 

In mid-April, cash-back offers had dropped as low as .4% at banks including Westpac and BNZ, as banks tightened up in the face of the pandemic. 

One adviser told TMM Online that conditions had begun to improve for borrowers in recent weeks: "During lock-down some banks dropped cash backs completely, with some at 0.3%. They're now back up to 0.6%," the adviser said. 

Craig Pope, of Pope & Co Mortgages said the market was still "inconsistent at the moment" and has seen cash backs as low as .4% and .5%.

He said banks were prepared to match other offers. "ANZ might be the better at the moment around .5-.60%," he added. 

Hamish Patel, of Mortgages Online, said the ever-changing market was a great opportunity for advisers.

"The golden age for brokers has arrived," he said. "The real value proposition will now become more obvious. There is now more variance than ever between different banks, their lending criteria and pricing.The consumer would be selling themselves short of they assumed that their own bank was a reflection of the entire market."

The huge variation in cash-back policies comes as lenders rejig their lending criteria post-Covid-19. Some banks, like Kiwibank, are offering investors up to 80% LVR, while the big four banks have stuck to tight internal credit limits. 

As cash backs and LVR limits continue to fluctuate, banks are also fighting a price war on interest rates. 

Kiwibank fired the latest shots last week, cutting floating rates by 1%, putting them nearly 1% ahead of their big four rivals.