MyState becomes latest to join cashback trend

Tasmania-based lender MyState Bank has expanded its cashback offer, making it available to all customers Australia-wide.

Earlier this year, the lender launched a $2,000 refinance cashback offer to Tasmanian residents refinancing their home loans. The bank has now expanded its offer to all Australian borrowers refinancing an owner-occupier or investment loan over $250,000 with an LVR of under 80 per cent.

The cashback offer is available for all new, relevant applications received from this week (starting 24 August). 

The lender has become the latest bank to offer sizeable cashback offers to the increasingly competitive refinance market. ANZ recently announced that it was extending deadlines for its popular refinance cashback offer (which at one point earlier this year reached $4,000). The major bank’s offer had led to a surge in refinance applications earlier this year, which helped drive strong growth across its mortgage portfolio in 3Q2020 but negatively impacted turnaround times for mortgage applications.

MyState Bank also suffered from lags in processing times recently, announcing that it would no longer be accepting new applications for the government’s First Home Loan Deposit Scheme from anyone outside of Tasmania.

MyState Bank’s managing director and chief executive officer, Melos Sulicich, told Mortgage Business: “We’re certainly punching above our weight again, to the point where we’ve got so many of those loans coming in [that] we’ve actually had to take a pause on those from mainland Australia for the time being.”

He explained: “We were doing so much it was starting to affect our service levels. So we’ll just pause on that for the time being, get ourselves back in order and then we will reopen to those again in the time to come.”

While Mr Sulicich said he did not know how long the pause would be, it would be dependent on “how quickly [the bank] can get the backlog through the system”.

Rate reduction for OO, P&I loans

As well as expanding the reach of its cashback offer, MyState Bank also announced some rate reductions.

For new applications from 24 August, the owner-occupied basic variable rate for principal and interest repayments (P&I) for loans with a loan-to-value ratio between 60-80 per cent will be 2.79 per cent (previously 2.83 per cent).

The bank has also introduced a new owner-occupied basic variable rate for P&I loans where the LVR is less than or equal to 60 per cent LVR. For these low-LVR loans, the rate will be 2.69 per cent. Previously, borrowers in this tier were paying 2.83 per cent.

[Related: Non-major bank ‘pauses’ FHLDS loans]