Retention cashback offers rise as lenders fight to keep home loans
Mortgage advisers say New Zealand banks are increasingly paying borrowers to stay put, as competition for home loans shifts from winning new customers to holding existing ones.
Retention cashbacks are becoming more common when fixed‑rate home loans roll over, changing the calculus for refinances and restructures for both first‑home buyers and property investors.
The trend accelerated late in 2025, when ANZ launched a campaign offering cash contributions equal to 1.5% of loan amounts to new home loan borrowers, prompting rivals to match those incentives and, in some cases, offer money to customers who stayed, RNZ reported.
Helen Stuart, a mortgage adviser at Compass Mortgages, said she had recently seen “retention payments” offered by several banks, particularly when all of a client’s lending was coming off fixed terms. Stuart noted it was harder to move partially fixed loans because of potential break fees, and said retention offers were often “about 0.4% of the loan amount”, although “it varies.”
When staying pays as much as switching
For advisers, the key question is whether clients are better off taking a retention payment or switching for sharper mortgage rates and a larger cashback.
Hastings‑based adviser Campbell Hastie said activity had slowed since December, but retention deals had been significant.
“The number of retention payments we organised was probably higher than the number of refinance deals we concluded,” Hastie told RNZ.
He added that by the time legal fees for moving were included, “in many cases the retention cash payment looked about the same as the refinance cash less legal fees, not to mention the effort required to actually make the change.”
That equation can make a retention deal attractive for borrowers who are otherwise happy with their current bank and loan structure, particularly if borrowing capacity is already stretched.
Smaller cash for loyal borrowers than new business
Not all borrowers will qualify for stay‑put cash, and the incentives are typically slimmer than those on offer to win new business.
Jeremy Andrews of Key Mortgages said outcomes depended on how long a customer had held their loan, whether they had previously taken a cashback, and whether they had more than 20% equity. In some cases, banks refused retention cash where break fees or higher market mortgage rates would make refinancing detrimental.
“When retention cash is offered it’s typically a lot less than the same bank will offer for new business – often between 0.25% to 0.4% of the lending amount, compared to currently up to 0.9% or even 1% cashback for new or refinanced lending,” Andrews said.
ANZ said it was “fighting to hold on to and win new customers in a very competitive market” and would “offer deals like cash contributions” at times. Westpac likewise said “competition was fierce” and it was “working hard to both retain existing customers and win new ones.”
Recent mortgages.co.nz–Tony Alexander data also show enquiry from first‑home buyers and property investors softening in a clear buyers’ market, as more clients prioritise structure and rate certainty over one‑off cashback deals.
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