What Motivates You to Refinance?
When choosing a home loan, borrowers often compare the benefits of lower interest rates against cashback offers. Cashback offers provide a lump sum payment after loan settlement, offering immediate financial flexibility. On the other hand, lower interest rates usually result in long-term savings by reducing monthly payments and overall interest costs. The decision depends on personal financial goals: if immediate cash is needed, a cashback offer might be advantageous; if long-term savings are the priority, a lower interest rate could be the better option. Ultimately, it comes down to individual circumstances and what aligns best with your financial objectives.
| Cashback Offer | Low Interest Rate | |
|---|---|---|
| Loan | 6.50% | 6.00% |
| Cashback | $2,000 | $0 |
| P/I Monthly Repayment | $3,376 | $3,222 |
| Monthly Savings | $154 | |
| Time to Make Up Difference for Forgoing Cashback | 1 year and 1 month | |
| Savings Over 25-Year Loan Life | $2,000 | $46,200 |
Calculations provided are estimates only. For more accurate comparisons of loan repayments and options to reduce interest costs, it is recommended to use the Repayments Calculator. Keep in mind that interest rates are likely to fluctuate over the 25-year loan period, which may impact these figures. However, the table serves as a guide to illustrate the basic calculations when comparing cashback offers and interest rates.
When considering cashback offers, it’s important to carefully review the terms and conditions. Some lenders may impose specific requirements or restrictions on how the cashback can be used. Additionally, the cashback amount might vary depending on factors such as the loan amount. Before accepting a cashback offer, ensure you understand the eligibility criteria and any potential consequences.
Both cashback offers and low-interest rate loans have their advantages, and the best choice depends on your financial situation. A competitive rate paired with a cashback offer can be particularly appealing.
To make an informed decision, consider your immediate financial needs, long-term goals, and overall preferences. Book an appointment with our friendly team—we’ll assess your circumstances and help you choose the most appropriate option that aligns with your broader financial strategy.
