The rebate will be deposited into the borrower’s home loan account with two months of settlement.
Other banks within the group, such as St George, are offering a $1500 purchase cashback.
The bank is also extending its $2000 refinance rebate offer under the Premier Advantage Package. It excludes switches from companies within the Westpac Group, which includes St George, Bank of Melbourne, BankSA and RAMS.
Heritage Bank is cutting rates on a range of investment principal-and-interest, and interest-only home loans, reducing rates to as low as 4.02 per cent.
“At a time when other lenders are lifting their rates we are going in the opposite direction,” said Stewart Saunders, Heritage Bank head of broker network.
“We encourage all borrowers to consider customer-owned banking as a different and more people-focused alternative to the big banks, particularly in the light of questionable behaviours currently under consideration as part of the banking royal commission.”
Last year, Westpac undertook several reviews of its lending controls in response to pressure from the prudential regulator and following bruising revelations at the banking inquiry.
They were aimed at ensuring borrowers had sufficient capacity to service their loans by conducting a detailed examination of total expenses and all sources of income.
But lenders continue attempting to grow net interest margins despite increased funding and regulatory pressures.
For example, ASX- listed Adelaide Bank has announced it is cutting fixed rates for new borrowers by up to 40 basis points on its owner-occupied principal-and-interest and investment principal-and-interest and interest-only ranging from one to five years.
The bank said it was an “exclusive offer to selected partners”.
Dozens of other lenders are offering discounts and more than 30 have special incentives, ranging from discounts to cash-back offers and fee waivers, to attract new borrowers, build front books and boost net interest margins, despite increased funding pressure and declining demand, according to ratecity.com.au, which monitors rates and offers.
National Australia Bank last week acceded to increasing funding pressure and raised variable owner-occupied and investor rates by up to 16 basis points.
NAB’s digital bank UBank raised rates on a range of fixed-interest products by 20 basis points. Four other lenders have also increased rates.