Refinancing · 17 September 2026 · Written by Arapeta Albert, Financial Adviser (FSP433026)
A cash contribution is paid once, a rate is paid for years, and the clawback ties the two together. Here is how to put all three on the same scale.
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A refinance cashback, which banks usually call a cash contribution, is a lump sum a new lender pays you when you move your home loan to it, commonly set as a percentage of the loan. On a $600,000 loan, a 1.25% contribution is $7,500. In return you agree to keep your lending with that bank for a set period, often three or four years. Leave early and some or all of the cash becomes repayable. That repayment is the clawback.
These offers are a normal part of the NZ mortgage market, and their size moves with competition. The Reserve Bank reported that when refinancing spiked late in 2025, banks offered new customers up to 1.5 percent of their mortgage balance as an upfront payment, compared with typical levels of around 0.9 percent, and nearly three times the usual amount of mortgage debt switched banks in December (Source: RBNZ Financial Stability Report, May 2026). A 1.25% offer sits toward the generous end of that range.
The offer on a bank's website is also not always the whole picture. A lender can make a different contribution available through a Financial Adviser than the one it advertises to the public, so two borrowers moving the same loan can be looking at different figures. When a contribution above the advertised level sits alongside rates that look on par with the bigger banks, it is a real offer worth looking at closely. The question is what it is worth once the rate, the clawback and your own plans are measured on the same scale.
The common mistake is comparing a one-off percentage with an annual one, as if 1.25% cash were the same as a rate 1.25 points lower. It is not. The cash arrives once. A rate difference is paid every year. To compare them fairly, spread the cash over the years you actually expect to stay.
Illustrative arithmetic only, not a current offer. It ignores the balance reducing over time, which makes a rate gap worth slightly less each year.
The same arithmetic gives a break-even. Suppose another lender offers no cash but a rate 0.25 points lower. On $600,000 that is worth roughly $1,500 a year, so the $7,500 contribution stays ahead for about five years, and the lower rate wins after that. With rates genuinely on par there is no gap to erode it, and the contribution is simply cash in hand, less your switching costs.
"On par" describes today's rate card. A clawback period of three or four years is longer than a one or two year fixed term, so a borrower who fixes for either and takes the cash will refix at least once while the clawback still applies. The contribution is paid for this rate, but the commitment covers the next one too.
That changes your position at the next refix. Today you can walk to whichever lender offers the best package. At the refix, walking costs the unexpired share of the contribution. Where the clawback reduces evenly over four years, leaving at the two year mark means repaying about half, roughly $3,750 in this example. The new lender's pricing at that refix does not have to be the sharpest in the market, only close enough that moving is not worth the repayment.
None of that makes the offer a bad one. It means the fair comparison is not just the rate today but the lender's pricing across the whole clawback period, and the features you will live with for that time: how it handles loan splits, offset or revolving credit, and a future top-up. How the clawback clock restarts each time you take a new contribution is covered in our guide to refinancing your mortgage in NZ, alongside break fees and the term reset.
Refinancing to another lender is the obvious trigger, but it is rarely the only one. Selling the property and repaying the loan usually counts, and some agreements are wider still. Kiwibank's published terms (as at September 2026), for example, require customers to maintain their banking relationship for four years, including having income direct credited into a Kiwibank account, and state that the bank may require repayment if that relationship changes significantly. Its repayment is calculated on a daily pro-rated basis over 1,460 days (Source: Kiwibank).
How long the clawback runs. Whether it reduces daily, monthly or in yearly steps. What counts as leaving: refinancing, selling, or moving your salary and everyday banking.
Whether your current lender will claw back a contribution it paid you, and whether any fixed term carries a break fee. Both come off the new offer before it is compared with anything.
Yes. Refixing with your existing lender generally does not involve a fresh credit assessment, but moving to a new lender does. The new bank assesses your income, expenses and debts as if you were a new borrower, tests the loan at its own assessment rate, and applies the Reserve Bank's lending settings. Banks may write up to 20% of new owner occupier lending above a debt to income ratio of 6 (Source: RBNZ), and up to 25% of new owner occupier lending to borrowers with less than a 20% deposit (Source: RBNZ).
Two practical consequences follow. If your income has dropped or your household costs have grown since you last borrowed, a loan you comfortably hold today may not pass a new lender's test. And cash contributions are commonly conditional on loan size and equity under each bank's own terms, so an advertised headline figure is not a promise that a particular loan will receive it. How those limits interact is set out in our guides to debt to income ratios in NZ and LVR rules in NZ, and the current settings are recorded on our page of current NZ lending rules.
It can be, and the numbers usually decide it quickly once they are laid out in order. Start with the contribution. Subtract legal costs, any valuation, any break fee on your current fixed term, and any clawback your current lender will claim. Then set what is left against the rate difference, spread over the years you realistically expect to keep the loan, including at least one refix.
Timing matters as much as the offer. The end of a fixed term is usually the cleanest moment to switch, because there is nothing to break. If you are part way through a term, the break fee can absorb most of a contribution on its own.
In our experience at Trebla, the most useful number in this decision is often one that is not advertised anywhere: what your existing lender offers to keep you once it knows a competing offer is on the table. Sometimes that closes the gap and the switch is not needed. Sometimes it does not, and the move is clearly worthwhile. Either way, the comparison is only fair when both offers are measured over the same years.
Trebla Partners Limited (FSP728251) is a Financial Advice Provider. If you are weighing a cashback offer against your current loan, a Financial Adviser can lay out the full calculation for your circumstances before you commit. You can book a time at book.trebla.nz/book.
A new lender pays you a lump sum, usually a percentage of the loan, when you move your home loan to it. In return you agree to keep your lending with that bank for a set period, often three or four years. If you leave early, for example by refinancing again or selling, some or all of the cash can be clawed back.
It depends on how long you keep the loan. Spread the cash over the years you expect to stay: $7,500 on a $600,000 loan is worth about $2,500 a year over three years but $1,500 a year over five. A rate 0.25 points lower is worth roughly $1,500 a year on the same loan, so in that example the cash stays ahead for about five years and the lower rate wins after that.
Usually, if you leave inside the clawback period. How much depends on the agreement: some banks reduce the amount daily on a pro-rata basis, others in larger steps. Some agreements can also be triggered by other changes, such as moving your income crediting to another bank, so the terms are worth reading before you sign.
Yes. A new lender assesses your income, expenses and debts as a new application, tests the loan at its own assessment rate, and applies the Reserve Bank's debt to income and loan to value settings. Cash contributions are also commonly conditional on loan size and equity, so an advertised figure is not guaranteed for every loan.
The end of a fixed term is usually the cleanest point, because there is no break fee to pay. Part way through a fixed term, a break fee and any clawback from your current lender can absorb much of a new contribution, so both need to be known in writing before the offers are compared.
Sometimes. Existing lenders can put forward a retention offer when they know a borrower has a competing offer, and that can narrow or close the gap. Whether it does depends on the lender and your circumstances, and a Financial Adviser can compare both offers over the same period for you.
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This article is general in nature and is not financial advice. It is published by Trebla Partners Limited (FSP728251), a Financial Advice Provider. The figures used are illustrative examples, not current offers from any lender. Cash contribution terms, lending criteria and lender policies vary and change regularly. Always seek advice specific to your situation before making decisions, which you can arrange at book.trebla.nz/book. Read our disclosure statement →
