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Brokers are lukewarm on the recent wave of lender cashback offers, with some calling for faster turnarounds and more flexible assessment instead.
NAB is the latest lender to try to win business with financial incentives after unveiling a $1,000 gift card this week.
Several other lenders have also introduced cashback offers in the past five months, including St George, Pepper, Australian First Mortgage and CUA.
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Start Fresh Finance owner Jan Watman said a rebate or gift card might act as tiebreaker between two otherwise equal lenders, but that it would never be enough on its own.
Ms Watman told The Adviser that banks would be better advised to offer faster loan processing.
“The frustration is when it drags on and they start to question whether they should be going somewhere else,” she said.
Steven Grimmer from Grimmer Finance said “a cash gift is not high on the list of priorities” when a broker gets clients to consider their long-term goals.
He said the most important thing banks could do to win business would be to evaluate loan applications in a more flexible way.
“I think non-conforming lenders are the ones that are most prepared to assist a client in need, whereas the major banks are not,” he said.
Mercantile Lending Solutions director Frank Genovese said financial incentives can be attractive to young first home buyers who are struggling to enter the market.
However, he told The Adviser that lenders also need to invest in their loan processing systems.
Mr Genovese said a lot of lenders failed to understand how much clients value fast turnarounds.
Mortgage Extra owner Dan Kocovski said his clients have a positive view of cash rebates and gift cards, especially when it comes to refinancing.
“If they can change over to another bank at a cheaper rate and it costs them nothing, that’s a done deal basically,” he said.
Mr Kocovski said these financial incentives are also good news for brokers because they give them an excuse to reconnect with old clients and suggest a home loan review.
[Related: Brokers fire up after dramatic rate cuts]
