If I refinance, will I have to repay my bank's cashback?

The expiry date and calculation matter

A bank's cash contribution can be tied to keeping your lending with it for a stated period. Some agreements require all or part of the contribution to be repaid if the loan is discharged during that period. Do not assume the repayment reduces evenly each year; read your agreement.

Find the contribution date, amount, repayment clause and any later variation. Ask the bank for a written figure for the date you are considering, especially if only some of the lending is moving.

Do the net calculation

Start with the new contribution and any interest benefit, then subtract the old contribution repayment, legal fees, break costs and other switching expenses. Compare that with the current bank's final retention offer over the same period.

A loan that becomes free of a cashback repayment soon may be worth reviewing again at that date. The best timing depends on the rate difference and how much the existing repayment would fall or disappear.

Keep adviser fees separate

A bank cash contribution repayment is different from any fee in an adviser's disclosure or engagement terms. Ask what each amount covers and when it would become payable. The Commerce Commission has identified both cash contribution and adviser commission clawbacks as potential barriers to switching.