Skyrocketing refinancing has made cash-back incentives an expensive exercise for the banks. Recently, the big banks have been raising interest rates for new borrowers in addition to the standard RBA bank cash rate rises, partially reversing the discounts available to new customers. Over the past 12 months, banks have been at the centre of a “refinancing war” with cash-backs ranging from $2,000 to $4,000, with smaller players offering even more. Recent communications seem to indicate that the cash-back incentives are set to be scaled back from 30th June 2023. The move suggests that the strong competition for refinances may have resulted in lenders writing loans below the cost of capital, and hence this practice is expected to stop soon.