The short answer
Should I accept my bank’s mortgage retention offer or refinance?
Put both offers in writing and compare their total cost over the same period. A lower rate at another bank can lose its advantage after legal fees and repayment of an earlier cashback. A retention payment can also come with new conditions. The best outcome may be to negotiate with your current bank, stay on a different structure or switch.
Ask your current bank for its complete offer
Record the offered rate for each loan split, the fixed term, any cash contribution and the conditions attached to it. Ask whether the bank can improve either the rate or the contribution. A phone quote is useful, but written terms make the comparison clearer.
Check whether accepting a new contribution creates a fresh repayment period. If an earlier contribution is still within its clawback period, establish what would be repayable if you left on a particular date.
Compare the whole refinance package
For the other lender, use a rate you could actually qualify for, its contribution, legal and valuation costs, and any cost of leaving the current bank. Include a fixed-rate break fee if you would move before expiry.
Compare repayments and interest on matching loan amounts and time periods. A new 30-year loan can appear to reduce repayments simply because the repayment term has been extended; that does not automatically lower the total cost.
Know when to decide
If the current bank's final offer is competitive and the structure fits your plans, staying can be sensible. If another lender is materially better after costs, assess eligibility and timing before committing. You can start reviewing before the fixed term expires without assuming you must break it early.
For your own situation
What to have ready
- Current bank's written rate and retention contribution
- Other lender's indicative terms and conditions
- Previous cashback repayment amount and expiry
- Legal, valuation and break costs
- Repayments and loan structure over the same period
Explore the detail
Independent tools and reading
Talk through the numbers
Get a clear next step.
Nathan can review your lending position and the options relevant to you. Start with the question you are trying to answer; there is no need to send sensitive documents through the public enquiry form.
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General information only. Rates, policies and eligibility can change. Personal advice depends on your circumstances and the terms actually available.