Most banks currently offer cash incentives for home owners to sign up for a "new home loan".
But the offers from three of the majors are apparently slated to end on August 31.
That means, to be sure you qualify you would need to move quickly. (You will have another four to eight weeks or so to draw down the loan if you qualify.)
ANZ, ASB and Westpac all have a time limit on their offers that ends on that date.
BNZ's offer ended formally on August 1, 2014, but that was replaced with a market-matching offer - "for a limited time you could also get yourself a healthy cash bonus* with new lending over $100,000."
BNZ isn't really promoting that offer, but it is clear the bank will front up with cash to keep you from choosing a rival.
And that may be the way ANZ, ASB and Westpac respond when their current offers expire.
Kiwibank, the Co-operative Bank, SBS Bank and TSB Bank all also have cash-back offers but without a fixed expiry date.
These banks, however, emphasise their offers are "for a limited time" - presumably awaiting the exit by the majors.
With almost everyone offering $1,000, $2,000 or as much as a $3,000 cash incentive, and almost everyone offering to match their rivals, the promotion no longer looks any different at any one bank. And that is a problem for all of them because it is no longer unique.
If you used the $3,000 incentive to pay down your loan, over the life of a 25 year loan you would save another $2,794 in interest. For a (minimum) $250,000 borrowed, instead of paying the bank a total interest charge of $232,768 over a 25 year loan at 5.99% interest on top of the $250,000 you borrowed, you would instead pay $229,974 in interest for a new $247,000 borrowed. That's a total of $476,974 to completely pay off the loan, rather than the full $482,768. (Of course these are just estimates because the interest rate won't be fixed for the life of the loan. But the differences will be similar.)
From the bank's viewpoint, they will still win 99% of the interest from you over the life of the loan. The incentive is a marketing enticement and a very minor saving - so long as you stay with them to the end. It is less like this if you chop and change banks.
You can view the current home loan incentives for all banks here.
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