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2020 - Mortgage Cashback from Banks

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  1. #21

    Join Date
    Dec 2018
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    Quote Originally Posted by bdw
    My local mate has been getting a cheque 5 times over the last 10 years (1%-2% each time) for doing nothing, simply extending the lock in period of his mortgage with the bank.

    In my case, I just did the a quick math and I actually got 5% cashback last year (I had a $3m outstanding mortgage and got $152,500 cashback). The way I did this was to redo the mortage from scratch, but still stayed with the same bank (SC), had to pay $5k-10k for a solicitor, I redrew up to $7m (50% of my property current value), but then the extra $4m I redraw can deposit straight back onto the loan once done so still end up with a $3m mortgage in the end. So effectively 5% cashback on a $3m mortgage . Having to visit a solicitor and do all that shit was a pain but definitely worth it to get $152k cash back.

    That's pretty impressive. If I've read that right your cash back is about what the interest component on your resulting mortgage payments would be over a two year period which means you've effectively got about two years interest free finance.

    Does anyone have any recent experience with DBS cash back deals?

  2. #22

    Join Date
    Oct 2006
    Location
    Hong Kong
    Posts
    13,682
    Quote Originally Posted by jgl
    There was a thread about this last year, they stopped doing 2% and last I had checked around October it was closer to 1.5%. Maybe it's dropped lower since then. Off memory bdw managed to sneak in just before the initial drop.
    I also was able to remortgage last year before they dropped the cashback amounts down from 2% to closer to 1%. However wasn't aware about the lock ins which would also give you extra cashback. Anyway lets see next year what I can do when my 2 year lock in ends.

  3. #23

    Join Date
    Jul 2004
    Posts
    3,341
    Quote Originally Posted by bdw
    but then the extra $4m I redraw can deposit straight back onto the loan once done so still end up with a $3m mortgage in the end.
    You mean keep $4m in mortgage-linked savings account or straight away partial repayment of mortgage without any handling fee and/or penalty!! If its later then its a big loophole and SC are bunch of morons, all existing property owners with property value increased by whatever percent could simply get 4-5 years worth of interest payment as cashback by simply drawing highest amount and pay back immediately!!!

  4. #24

    Join Date
    Aug 2006
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    10,016

    I don't think you can just turn around and repay the loan with the additional borrowings. I think @bdw might be referring to putting the cash into the mortgage offset account, which has the same effect.

    Crap, I wish I'd thought if this, even though I suspect you're not supposed to do this.

    shri and bdw like this.

  5. #25
    bdw
    bdw is offline

    Join Date
    Feb 2009
    Posts
    5,659

    Sorry guys, yes to clarify I meant to dump the money into a mortgage offset account rather than repay the mortgage. So I increased my mortgage from $3m to $7m, got 2.1% cashback on $7m, then can put $3.5million back into an offset account which earns interest at the same rate as the mortgage, therefore has the same effect as reducing my mortgage back down to $3.5m.

    Incidentally I think the offset account is BETTER than paying off your mortgage, same effect but leaves you with some flexibility to redraw, invest it somewhere else, buy a car, or do whatever you want with it .

    @nivantj - I still think SC are a bunch of morons, and there is some fumdamental flaw in the system, but anyway might as well take advantage of it.


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