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Owner Occupied Home Loan 3.44% @ Reduce Home Loans


I have been searching for a good home loan deal from UBANK to do refinancing and appears that Reduced Home Loan @ 3.44% Owner Occupied rate with $0 upfront fees is very competitive as well as other home loan products.

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  • Their fixed rates are decent too, but their establishment fees are extreme! I wonder if the apply when split with the variable, e.g. the variable already includes a valuation does $0 so it shouldn't be needed again for the fixed portion.

    • Ubank three year fixed IO still seems like it's probably a more attractive offer for me (would split with a variable and still save the P&I equivalent into the variable portion anyway, but then I've got the cash if it was needed for some reason, while having a bit more confidence re: future rate changes).

  • +9

    What is their history in rate rises? Have they increased rates for existing customers yet continuing to offer low rates for new customers?

    • This is a good question.

      I'm not too sure about signing…When it seems to good to be true it normally is.

    • +1

      I've been with them since May last year, and signed at 3.39%, currently at 3.54%. The cash rate hasn't changed since then, so I'm a little disappointed, but then I actually expected them to have upped it more since then.

      • most banks have moved .15 up since then because of borrowing costs, so that's actually "normal".

    • +83

      I'm going to have to neg this deal as a prior customer who has been shafted with 2x unexplained rate increases. First was approx an increase of .35 percent, followed by another increase of .25 percent.

      Suddenly a year and a half later I was on a much more expensive rate then I had anticipated. And this was not due to rba cash rate increases. I asked why new customers were getting much better rates and threatened to leave. They did nothing to match the new customer rate and when I chose to leave for a much more competitive rate, the exit fee was exorbitant. I had to pay close to 1k for the loan when I exited.

      You will be much better off going with U bank or another competitor that does not increase rates without real justification, and try to lock you in with the extreme exit fee.

      • +37

        To add to this they also charged me an additional 150 dollar fee on granting the loan. Which they said they would refund when I discovered this,

        After many follow ups I never received the refund of that fee.. so it's been a bad experience all round

        • +23

          I had the exact same issue with the $150

          • +3

            @Kuzdog: Thanks. will happily steer clear.

        • Thanks, I will steer clear also.
          My neg on the deal got revoked, however they can’t revoke my upvotes for your neg.

          To the community please check loans.com.au which provide competitive rates for a variety of loans. I’ve found the deals at reduce are very specific eg. only certain amounts, p&i etc. gets expensive fast when you need more features.

      • Thanks, good info.

      • Haven't exit fees been illegal since 2011?

        See: https://www.moneysmart.gov.au/borrowing-and-credit/home-loan...

        • +2

          Not for fixed rate loans, and there are always discharge fees etc which I'm sure some of the dodgy lenders inflate

          • +1

            @buckster: When I paid off my westpac loan a couple of years early (late last year) I was charged $141.60 for “discharge registration fee” and $150 for “document handling fee for discharge of mortgage”

            The latter seemed like a fee grab to me. (Any fee that is rounded off to the nearest 50 or 100… always looks arbitrary to me).

            • +2

              @Eeples: 141.60 is government fee.
              150 is Westpac fee.

              • @mortgagebroker: yes. Above is pretty normal. Most lenders charge a "small" ($100-$300) admin (exit) fee, plus you pay around $150 to your state govt to re-register the loan.

            • @Eeples: The $150 will be the fee paid to Westpac's lawyers for preparing the discharge of mortgage form and taking it to the titles office to register. The $141.60 will be the land titles fee for registering the discharge of mortgage.

    • +1

      I signed on at 3.4% two and a half years ago and I'm think I'm up to 3.85% now. It has an offset account (while I don't believe UBank does?) but I might look at refinancing if it moves again. My loan is pretty low though, < 200k, so a few 0.x% only changes repayments by a few $$.

      • +2

        I'm on less than that with NAB, admittedly it's a bigger loan (around 400k). 3.85% doesn't sound like a great rate to me with a ma & pa bank.

        • Hey Brad, can you please tell me what rate you're on with NAB: I'm trying to renegotiate with them after being with them for over 15 years and they are playing me for Simple Simon. Thanks in advance

          • @oraserat: My friend has a PPOR loan with NAB. He is on about 3.79% (half is paid off and about $500K).

            Not sure about the details of the loans like offset and such though.

    • +1

      Yes, I signed on with them last year and they raised my interest rate 0.15% before I had made my first repayment.

    • I signed up 2 years ago at 3.35% on a $400K owner-occupied mortgage at about 40% LVR (no offset acct).

      I had one rate increase in 2 years and my rate is currently 3.50%.

      Other people with bad experiences may be investment loans, higher risk, higher LVR, etc.

  • They do seem to look after existing customers but not as much as existing customers. You can always give them a call and negotiate. See some comments https://www.productreview.com.au/p/reduce-home-loans.html. Some existing customers are able to receive a lower rate but not as good as the 3.44% but still better than UBANK.

    • +45

      They do seem to look after existing customers but not as much as existing customers

      Sounds like banker speak is in play here. 😄

      • +2

        Hahahaha bank looks after existing customer? Lolll

        • Oh, they "look after" them alright… ;)

    • +10

      where's the link to a better deal (lower rate than 3.44% with offset)?

      • A link no bank advertises the actual rate you get…. Call a COB and ask for better than 3.44 and you will get it.

  • +1

    I feel like Ubank will eventually match this. They have always decreased their rates to be the cheapest.

  • +4

    I have been with them for almost a couple of years and I started with 3.44%. After one year they increased to 3.59%
    I got a call last month from a reduced home loans guy saying he would give $50 in gift voucher after 3 reviews. I did on Facebook, product review and somewhere else I cannot remember. They sent me the the gift voucher.
    I also complained to him new customers were still able to get 3.44% while I was on 3.59%
    They said someone was going to call me but and a guy called to say he was going to call me back to discuss if I could be moved to another rate. It never happened.
    If I am happy with them? So far, it is ok. I have been with banks before and they were increasing the interest much more often. Perhaps I will change my mind in the future, not sure. I know reduced loans exit fees are shocking…if I am not wrong about $800.

    • +5

      I have heard they offer incentives and "better service" for positive reviews.

      • +7

        Wow that sounds like its illegal - essentially being paid to write positive reviews. Negging this for the companies behaviour - doesn’t give confidence in signing up with them

        • +1

          They did not say to write positive reviews…
          Only reviews. I did not say only positive things.

          • @marcnunes:

            offer incentives and "better service" for positive reviews

            Re electronicsguy

        • Neg for this incentive for reviews deal.

    • your rate of 3.59% won't take long to payoff the slightly extra exit fees.

      why dont you go with a different bank and pay 4.00% and have $300 exit fees?

    • -1

      Exactly scum bags, dodgy practises.

  • +6

    I would not recommend them. There are no Customer Service Reps just sales managers who can be very hard to deal with and contact. The rates do increase for existing customers.

    • I have never needed to contact Reduce in 2 years.

      Just setup the mortgage and pay the repayments.

      Do you everyday banking with BankWest.

      Pretty simple.

      In 2 yrs, my rate has increased from 3.35% to 3.50%.

  • +1

    This is based on a $150k loan, and in the fine print states that higher loan amounts will be at a different comparison rate.

    I don't think this deal is worth getting too excited over.

    • +3

      That's standard fine print for any loan and comparison rate. Fwiw The fine print states 'may' not 'will'. There's nothing in the fees etc. To indicate the comparison rate would alter significantly for higher loan amounts in this deal.

    • +1

      Isn't 150k the mandatory mortgage amount for calculating the comparison rate…?

      • +1

        Yep. Seems to be a very out of touch number.

    • +1

      the phone person told me he thought he could pre-approve us for $1.8m at 3.44%…

      • You must be very rich Simon, can I work for you?

  • +2

    Looks pretty good. Free offset. Unlimited redraw. Split available. Low rate. If you're borrowing under$250,000 seems there's some fees. If possible just borrow more and don't draw down what you don't need.

    Note just went through refinancing myself (not with ubank) we're model prospects but be ready for 2-3 months to get it settled.

    Peter Gillespie

  • Any offset account?

    • +4

      Yes. It's free. Likely not a true offset account just a internal accounting split on the loan. This isn't unusual but the downside is if it's not a 'real' of set account then of Ubank go bust then your savings on the offset account are not protected by the national bank guarantee.

      • +1

        Ubank is a part of NAB though?

      • Do you know anywhere where a bank explicitly says an offset is covered? Genuine question. I’d be concerned that it might have a different character as classified by the bank when compared to a standard ‘deposit’ account which is covered.

      • +1

        I also seem to recall that investors need a separate offset account for some reason, rather than the one big bucket method.

  • Suncorp has 3.49 fixed for 1 year for OO -P/I

    • +1

      Not much point in fixed for the short term IMO. Rates more likely to stay where they are our even drop a little as the housing bubble is deflating.

  • +14

    Avoid them. I've been with Reduce for 8 years and can confirm they suck you in with a low rate then slowly increase. I signed up on the cheapest rate going at the time, which I guess would be the equivalent to this plan and am now up to 4.51%. I'm looking to refinance elsewhere.

    • +5

      Holy crap, with that rate what took you so long to refinance?

      • +5

        Exit fee

        • +4

          You know some banks offer deals towards exit or other fees.
          Ie commbank $2k and ANZ $2.5k?

    • I have been with reduce for 2 years …
      Starting rate = 3.35%
      Current rate = 3.50%.

      Maybe you have an investment loan or a higher risk loan?

      • Nope, not investment or higher risk, it's their regular owner occupied home loan and was the best available at the time.

        • It's also depend on how much you borrow. 2M loan get better rates than 200k loan.

    • I jumped on to their 24/7 chat and asked why my rate its so much higher than their currently advertised rate and was told by the chat person they did not have access to enough information and a consultant will be in touch with me ASAP to answer my question.

    • Exactly… Go to a customer owned bank call them they will match it.

  • +7

    I've been watching these guys in terms of their rates for a couple of years or more and they are consistently the cheapest on offer in terms of advertised rates. However the stories of them raising rates for individuals after they sign up are disappointing and I've held off refinancing despite being tempted. I'm currently paying 3.69% with my lender and that has been steady for a couple of years now.

    • +2

      What lender? I don't know of any lender that has not changed its rates upwards in the past few years. Particularly if the rate starts with a 3.

      • +5

        AMP bank. Started at 3.69, briefly went to 3.74 before going back to 3.69. Loan started at the beginning of 2017 so almost 2 years.

        • +1

          Unsure why the answer was negged; +1 to cancel that.

        • Going to add to this, had a very positive experience with AMP Bank re rate movements.

          Every time they would advise of an increase I would call and they would decrease back down to what I had found (cheapest available rate with offset).

          Currently with Homeloans, and can't wait for my 3 year terms to mature so I can move back despite the slightly higher rates. While not as bad as some other lenders, Homeloans themselves also like to raise rates for existing customers to fund new business.

          Only neg with AMP was their tardiness in discharging my loan when I bought a new property and refinanced my existing. This lead to a failed settlement and vendor charging me penalty interest. I sent a letter of complaint to AMP and they covered the penalty interest (over $1k) without a single question asked.

        • Interesting. I was with amp for 10 years and while generally good with rates in the past year they became inflexible and had me at 4.05, what they called “the best rate they could offer”
          Refinanced with ing and it’s much betywr

          • @Hoju: Okay, good to know. My experience was 2-3 years ago.

            I'm with ING for everyday banking so that too is an option.

  • Almost perfect timing… I'll be refinancing in about 45 days and need to do my homework again. 150K won't even do it for me though

    • +2

      150K minimum, mine is more than that.

  • +1

    I have had this product for 4 months now, its fine, few things:

    -Process to establish was pretty straightforward
    -Valuation costs you a bit if you are looking at a house over a certain amount
    -The offset/main account is pretty basic, no multi-factor authentication and the interface is very dated, etc, be careful!
    -I can confirm the rate hasn't risen in 4 months, but am assuming it can't stay this low for ever, my thoughts are that they will probably suck a LOT of people in with the very low rate then increase once they have a good customer base, which is when i will refinance

    EDIT - forgot one thing, there is an exit fee, which i thought were illegal, but its worded differently and is i think around $500 or so.

    • You’ll need another loan to pay the discharge fees

      • I think if you refi out to another lender that pays to cover the cost of switching fees you might be ok. Discharge fees are criminal though.

  • +1

    Another option is https://www.easystreet.com.au/standard-variable-home-loan @ 3.49%. Backed by a Credit Union so more established.

  • Is this a 100% offset account ?

  • +9

    I’m on a flexible rate with them. Since signing up in April, I had two rate rises - the rate is still decent, but nowhere as good as what I signed up for.

    Wouldn’t recommend for that reason.

    • Can I ask if this is for owner oc or investment?

      • Owner

        • +1

          Yea my comment below stands. Looks like the rate rises come differently for different people. In your case 3 times…. something is going on.

        • have you paid every repayment on time?

          what is your loan and LVR?

          • @matt-ozb: Why do you ask?

            • @Loki556: because no banks would randomly select customers to change rates, so there must be a difference between our scenarios as to why you have had two rate rises and I have had none.

              My details are:
              35% LVR
              full-time permanent employment for both account holders
              rate: 3.50% (signed up 2 years ago at 3.35%)

    • what sort of loan?
      what LVR?
      are you making all your repayments?
      are you a higher risk customer? limited savings, casual employment, etc?

  • At 3.44% this would be over $2k/year for me on the rate Nab is giving me, so it's an amount I can't really ignore out of convenience anymore. With the packages they're giving me 4.24, which is a discount on the staggeringly high standard rates they seem to offer.

    Would I have any luck getting Nab to offer a better rate than their standard rates though if they know I'm looking around, or am I pretty much stuck with it as an existing customer?

    • +3

      Time to change, but maybe not to these guys.
      Check Macquarie, HSBC, Aussie, or Easystreet if you're ok with internet only.

    • +1

      Is the property owner occupied and under 70% LVR? Otherwise you won't get 3.44%

      • -1

        Yeah, it is. Similar houses have been selling for well over $650k lately in neighboring streets, a nearly 100% increase on when it was bought around 5 years ago, so LVR wouldn't be an issue at all.

        • NAB should come down from the 4.24 that you are on. Might not be much. Give them a call and let them know you're looking at changing lenders for a cheaper option.

          • @mortgagebroker: Exactly this. Call them and tell them you are changing lenders unless they can give you something starting with a 3. If they call your bluff, walk away.

    • Call up nab say you've seen better rates around and you are thinking of changing but before you do can they offer a better rate. They'll give you a better deal for sure. I'm on 3.84 with about 80%LVR on a 420k loan. Phone call took me about 10mins easy as.

  • +5

    I am currently with these guys and regret it.
    Use this deal to negotiate a better deal from your current lender.
    Been with reduce for a year and the online banking is abysmal and the rate has increased 3 times even though they still advertise the same rate as when I started (different loan products have different rates and rate rises).
    I’d happily pay an extra 0.3% to be with someone else. Not changing as the exit fees would make all the pain of changing for nothing.

    • I have never logged-in to Reduce account in 2 years.

      Reduce is for mortgages not everyday banking.

      Suggest you bank with BankWest and setup a direct deposit for your Reduce mortgage repayments.

  • Any good investment home loans for refinancing?

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