Don’t Just Refix Your Mortgage - Get Paid For It! Here’s How Retention Cash Actually Works

Did you know some banks are willing to pay you to stay with them? It's true. 

When your fixed mortgage rate is coming to an end, your first thought is probably, "What's the new interest rate?"

While the rate is critical, most borrowers focus only on that and overlook a powerful tool that could put thousands of dollars back in their pocket: Retention Cash.

The "Thank You" Payment You Might Be Missing

Retention cash is a loyalty bonus. Banks offer it to existing, reliable customers when their fixed term ends. It's a simple incentive to encourage you to refix your mortgage with them rather than switching to a competitor.

Think of it as a "thank you" for your business. These offers can range from a few hundred dollars to several thousand, often depending on the size of your loan.

Why Your Bank is Willing to Pay

1. It's Cheaper to Keep You: It costs a bank less to keep a good customer than to find and onboard a new one.
2. It Prevents You from Shopping Around: They know the market is competitive. A cash offer makes you less likely to see what another lender is offering.
3. It Rewards Loyalty: In a competitive market, it's a key tool to hold onto their client base.

The Two Choices You Have at Refix Time

When your fixed rate is expiring, you have two choices:

1. Refix with your current bank: You lock in a new rate and term with them.
2. Refinance (Switch) to a new bank: You move your mortgage to a different lender, often to get a better rate or a larger "new client" cashback offer.

To stop you from refinancing, your current bank may present a retention offer as part of their refix package. The cash is typically paid directly into your account shortly after your new fixed term begins.

The Costly Mistake Most Homeowners Make

The biggest mistake you can make is simply accepting the first refix offer your bank sends you online. You could be missing out on valuable cash that could:

• Go straight back onto your mortgage principal (saving you thousands in long-term interest).
• Help pay for home improvements.
• Cover other household expenses.

How an Adviser Gives You the Advantage

Navigating these offers is tricky. Banks don't always advertise their best retention offers, and the amounts can often be negotiated.

As your Mortgage Adviser, my role is to do this work for you.

• I Know the Market: I keep track of all the current retention and new-client cashback offers across all the different banks.
• I Negotiate on Your Behalf: I will contact your bank's retention team directly to find out the best possible cash offer they are prepared to make to keep you.
• I Compare All Your Options: This is the most important part. I'll create a simple comparison:‍
  
  • Option A: Your current bank's best rate + their retention cash offer.‍
  • Option B: A new bank's best rate + their new-client cashback offer.

Sometimes, staying put is the best deal. Other times, switching banks - even for a similar rate - can be far more profitable if their cashback offer is significantly larger.

My goal is to ensure you get the best overall deal, balancing the interest rate, cash incentives, and the right loan structure for your needs.

Don't let your next refix be a missed opportunity. Let's chat before your rate expires and make sure you're getting the best possible outcome.

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