What Is A Cash Contribution?

As part of the process, once you have been unconditionally approved your adviser will negotiate pricing from the bank or lender. This includes interest rates and a cash contribution or is sometimes referred to as a cash incentive.

What is a cash contribution?

A cash contribution is a promotion that the banks and some lenders offer as an incentive or to say “thank you” for taking out the lending with them. This is normally a lump sum payment that is refunded to your home loan account (with that lender) either on settlement day or within a week following. 

Cash Contribution

How much will I get?

The amount of cash that you receive does vary depending on the loan size, the type of loan product, your LVR (loan to value ratio), what promotions are on at the time, eligibility and subject to availability or funding.

What are the T's & C's?

This does come with a cash agreement which is one of the documents you will sign with your solicitor. The cash agreement includes terms and conditions – One of which is that if you were to repay the lending in full within three to four years (depending on the lender) that you will need to pay the cash contribution back or part of – this is referred to as a “cash agreement claw back.”

If you are considering buying/selling or refinancing, we would generally suggest enquiring with the bank or lender if there is an active cash agreement in place and what the cash contribution claw back would be. Your adviser can often do this on your behalf. 

You can use the cash contribution for whatever you want. Some people use it to hire movers, buy furniture, contribute towards legal fees, put into savings or even make a lump sum payment to a floating loan. It’s up to you what you do with the money.

A cash contribution is just one factor to consider when taking out a new loan and it is best to discuss ALL your options with your preferred Priority Financial Adviser. Click here and we will put you in touch with one of our expert advisers.


Share This Post

Subscribe To Our Newsletter

Get updates and learn from the best