Refinancing incentive comes as non-major launches new broker platform
AMP Bank has announced that it will start offering $2,000 cashbacks to eligible customers until 30 September.
The offer is positioned as a strong incentive for brokers to use the new AMP Bank Broker Platform.
The broker must use this new platform to lodge the refinance application; the cashback is then provided to the customer upon successful settlement.
AMP Bank announced the cashback in a seminar at its Sydney headquarters on Wednesday, when the company gave attending brokers a deep dive into its new Simpology-developed lodgement platform.
Attractive cashbacks deals can be controversial.
Despite eroding banking margins, cashbacks can be used to lure customers into refinancing with a new bank with a short-term sugar hit.
Peter White, director of the Finance Brokers Association of Australia (FBAA) previously told MPA that cashbacks create increased due diligence for brokers to make sure the offer is in the best interests of the borrower.
When ANZ reduced its refinancing cashback from $4,000 to $2,000 in 2023, Mortgage and Finance Association of Australia (MFAA) chief executive Anja Pannek called it “a step in the right direction”.
While some major banks, including ANZ, still offer them, others including Westpac, NAB and Commonwealth Bank removed them in recent years.
The AFR in late-2024 revealed that NAB and Westpac have since given their bankers discretion to offer cashback, but they are not advertised nor are they common business practice.
But a growing number of smaller lenders are offering cashback incentives of late, including Regional Australia Bank, BankVic and ME Bank.
It is worth noting that AMP Bank’s cashback offer is being marketed directly to brokers and not to direct-to-bank customers. UP to 90% of AMP Bank’s home loans originate through the broker channel.
Paul Herbert (pictured), AMP Bank’s head of lending and everyday banking distribution, called the cashback “a neat way to support that transition of using a system that maybe is new to (brokers)”.
“The incentive is there for the borrower,” Herbert said to MPA. “That’s by design. We want to make sure the borrowers are rewarded for the brokers’ effort because that's ultimately what the brokers are trying to do, to deliver the best experience for their customers.”
