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Cash-back sweeteners curry favour only for short time, says CEO

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Australian Broker | 05 Jun 2014, 08:00 AM Agree 0
A bank chief executive has taken a dig at other lenders offering cash back for new and returning customers as a ‘sweetener’
  • Broker | 05 Jun 2014, 11:14 AM Agree 0
    Spot on , as brokers and customers aren't stupid , but banks sure like to treat them that way!
  • DanG | 05 Jun 2014, 11:31 AM Agree 0
    Nice ad attempt for ME Bank but I fail to see any sense in this

    "Favour" is intangible.

    “customers should understand they can save much more on their home loan in the long-term by locking in a lower rate.”

    Implies those not offering kickers have better rates? Maybe they're just paying less by doing the deal direct. Even so, a $1k kicker would be made back by the funder "short term" and certainly has no bearing on longer term rates.

    It could be a market share grab and they have at cost rates to go with the kicker. The same funder may have the worst rates in a year to recoup costs. Noone can say for sure about from the individual lender and Mcphee's vague blanket statement of phantom savings in the future is wiffy

    Exit costs + Entry costs = Cost of refinance.
    (Loan Balance x Rate difference) + Cashbacks = Benefit of refinance PA.

    Don't forget LMI. Paying again?

    Numbers mean something. ME banks spiel about a .05% cut and savings of a time in the future do not.
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