People looking for a mortgage have been reminded to pick their lender based on what will best serve them over the long term, not because of special introductory offers.

As banks dial back their lending to investors they are becoming more pro-active in targeting owner occupier customers and trying to entice them with cash-back offers and other giveaways.

For example, NAB is currently offering 250,000 frequent flyer points for new owner occupier home loans of $250,000 or more, when used in conjunction with a NAB credit card and transaction account.

While that may seem like an attractive deal, one banking analyst says otherwise.

“Try not to get caught up in the hype. If it looks too good to be true, then chances are, it probably is,” Peter Arnold from online home loan comparison portal Rate City said.

“Frequent flyer points and cash back gimmicks are great if they’re part of a product you’ve already selected on its merits, but if that’s what’s leading your decision-making then it’s time to take a step back and crunch the numbers,” Arnold said.

Analysis from RateCity reveals that the lowest NAB loan, which is priced at 4.15%, will cost $8,688 more than UBank’s lowest rate of 3.99%, on a $250,000 loan over 30 years, while the cash equivalent of the 250,000 frequent flyer points is less than $4,000 when taxes are factored in.