A cashback payment is genuinely valuable, but it’s a one-off event, while your interest rate and fees apply for as long as you hold the loan. Treat it as a separate line item in your decision, not as evidence the new loan is cheaper to hold.
Why it shouldn’t drive the decision alone
A modest ongoing rate difference can be worth far more than a cashback over even a few years. Compare the cashback against your total switching costs and against the ongoing rate/fee difference over your realistic holding period, not in isolation.
Read the conditions before counting on it
- Minimum loan term and minimum loan amount requirements
- A clawback clause requiring repayment of some or all of it if you refinance away again within a set period (commonly around two years, but this varies)
- Whether the ongoing rate is actually competitive without the cashback attached
How PolicyMatch treats it
The Refinance Workbench treats any cashback you enter as a separate one-off line item in the upfront switching-cost calculation, never folded into the ongoing cost comparison and never used to claim a “saving” on its own.
What to prepare
- The cashback offer’s full written conditions, including clawback terms
- Your realistic holding period for the new loan
- A comparison of the ongoing rate and fees, with and without the cashback in the picture
Next step: enter the offer into the Refinance Workbench to see it weighed properly against switching costs and ongoing cost.