I had a lot of people asking me late last year, “Should I be refinancing right now?” and there was a good reason for that.
In December 2025, refinancing activity hit record levels. In fact, Kelvin Davidson from Cotality shared via Trade Me that it was the biggest month on record for mortgage borrowing.
The Allure of Cashbacks
A huge chunk of that was people switching lenders, not just for rates, but for cashback offers. Some banks were offering cashbacks of up to around 1.5% of the loan value, which can add up quickly on larger loans.
What’s important here is that this wasn’t reckless borrowing. Most people refinancing were doing it sensibly, using the opportunity to improve their position or free up some cash, not stretch themselves.
Does Refinancing Still Make Sense?
Since then, banks have pulled those offers back a bit, but refinancing can still make sense, especially if your loan is coming off a fixed rate or sitting on floating.
"One thing I always remind people: Cashbacks aren’t free money. There are conditions, minimum stay periods, and sometimes legal or break costs involved."
The question is always: does this actually leave you better off overall?
That’s where getting the numbers checked properly really matters.