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Owner Occupied Home Loan 3.44% @ Reduce Home Loans

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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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  • +2

    I'm with Ubank and rate them highly. A low rate, free offset, free redraw (and easy to use online). This mob sounds a bit dicey.

    • +2

      When did you join uBank? They don’t seem to offer an offset account anymore. Free redraw is still offered though.

    • Ubank don't have an offset…

      • I stand corrected, Ubank only have redraw. It's free, unlimited, and with no minimum withdrawal, and from memory, capped at $5K daily, it's as easy to use as an offset account.

    • No, you're incorrect. They are not dicey. Why do you say that?

      • The unexpected and unexplained rate rises sound dicey.

        • If we decide to believe stories on forums, these guys with complaints do not even post any details … owner-occupied vs investment, repayments on-time, LVR, loan amount?

  • +1

    This company is run by Mortgage Ezy. Check their reviews online.

    3.44% product is provided by Adelaide Bank through Mortgage Ezy.

    LVR is 70%
    High discharge fees.

    • -1

      I am with Reduce and the funds are provided from Perpetual .. but that was 2 years ago when I setup my loan.

      • Different product. They have multiple funders.

        • Yea .. that's why I posted that comment .. ie multiple funders.

  • +2

    This company sounds soooood dodgy!

    • -1

      Not at all from my experience of 2 years. Why do you say that?

  • +5

    Ubank at 3.59% costs out better with zero ongoing fees versus the fees here, is stable with NAB ownership and the manual offset with unlimited redraws is easy to manage… Unless someone has a genuine stable offer then it's difficult to consider, just like many who have been burnt. I did look at these guys too, though happy with ubank, plus exceptional customer service!
    https://www.yourmortgage.com.au/amp/home-loan-guide/offset-v…
    A good article on offset v redraw which the latter is more like the ubank set up

  • Way too many dodgy stories after reading the comments in this post, e.g raising rates before even making first repayments, "payments" for positive online reviews, and people quickly ending up on a higher rate than I'm on with a big 4 bank (NAB). Going to have to neg.

    • -2

      Most of the comments are from people who dont even have a loan with Reduce, so the comments are meaningless.

      • To the contrary, many of the comments are from current or ex customers who have expressed dismay at Reduce's habit of exexpectedly raising rates. There are more stories of unhappy customers in this thread than supportive ones; their comments are far from meaningless, they paint a very clear picture. As always in business and in life, caveat emptor.

        • -1

          The people who do post negative comments, do not share any info about their loan. They are probably high risk customers.

      • you can read my post below or ask any questions here
        happy to answer as a current customer

  • +1

    I was with Ubank. They had the best rates for a little while then went nuts on their interest rate rises. They kept saying they were adjustments. It ended up being one of the highest on the market. They were still advertising very cheap rates fir new loans. Rang to complain and got told if I wasn't happy to go so I did. That was on a 750k loan. They are all the same. Advertise low to suck you in then go to town. There should be laws againt it

    • +1

      I have a friend who rang ubank and they happily matched their existing loan to the lower advertised rate.

  • +6

    It's important to note this loan provider is not a bank and they don't take any deposits. They instead get money by creating securities to sell to institutional investors.

    https://www.reduceloans.com.au/how-we-do-what-we-do/

    If we have another GFC like event expect interest rates to go up as the market freezes. RAMS was caught out in 2008 and had to be bailed out by Westpac. The securities usually have a short life, between 90 days and a year, so they need to be renewed and rolled over into new securities on a regular basis. Your loan is for 30 years but the money behind it may be traded hundreds of times.

    All banks are affected by money market rates, but companies without a deposit base are completely exposed.

  • Close relative used them. Loan taken out last dec (2017) there has been one rate rise since (this was when all the other banks also raised out of sync with the rba). Currently at 3.56% OWner occ. still lower than most. However seems that they raise the rates differently for different people

    I suspect it’s based on the likely hold the customer eats the termination fee.

  • +1

    After the royal commission, I would think that the future is a lot better to stick with the big banks as they would always be under scrutiny from the authorities . Alternatively , go with well known bricks and mortars credit unions or societies than with online mobs or not well known gimmick loans .

  • +1

    Probably a good deal to use as a negotiation point for other lenders, but there's a reason these guys aren't an absolutely huge company when they have the lowest rate. I suspect more profit is made from fees than customer retention as many refinance after a short time. Its a good rate, but be careful on this one…

    • +1

      Imagine that - a business plan that grows its profits from losing customers.

      • Ala “Springtime for Hitler”

  • +1

    I have been with them since June 2017. Started on 3.49%, one increase of 15 basis points to current 3.64%. That is for the loan with 100% offset account, plus 10$ monthly.
    Mortgage is held by Adelaide and Bendigo bank. Getting a loan directly from ABB would be much more expensive, not sure why anyone would do it, whatever savings in packages never make up for much higher interest payments.
    As mentioned before EZY online banking service is rather basic/dated. No MFA which this day and age is disappointing. Overall I am happy though, I think it is still one of the best rates available. Customer service has been pretty good to date.
    AFAIK ubank home loans do not offer offset which is important to me.

  • -1

    "
    Our home loan range has been awarded the following:

    5 stars by Canstar for 2015, 2016 , 2017 and 2018
    Best of the Best Cheapest Home Loan 2016, 2017, 2018 and 2019 by Money Magazine
    Best Investment and Best Owner Occupied Loans 2017 by Finder.com.au
    Experts Choice awards 2017 and 2018
    "

    Does that mean this dodgy company paid those rating companies to get the awards?

    • -2

      Reduce are not a dodgy company.

      Are you suggesting that Canstar, Money Magazine, finde.com.au, Experts Choice are all dodgy?

      I think you are dodgy making obviously incorrect statements.

  • check out TicToc home loans.
    similar to UBank rates, if not cheaper,
    and offers offset accounts for AU$ 10 per month.

  • +3

    This surely is a shill bargain. It reads like the company posting it.

  • I've been with Homestar for a year or so. 3.54%,offset.
    Rate hasn't changed, and is also competitive for io options.
    Sign up bonus pretty much covers all their fees.

    Just another option to add to the list.

    • -1

      I'm still at 3.50% with Reduce, so you could have got a lower rate.

      • I have a portion of io only loan against the property for investment use.
        Something not all lenders offered and at a pretty competitive rate.

        (and establishment and exit fees from memory were slightly cheaper with Homestar and their 900 buck sign up bonus covered refinancing costs. )

  • -1

    HSBC also have good rates at the moment. 3.59% advertised (although i was offered 3.55% when i went to talk to them) for their basic product, or 3.60% + $400pa for their offset account product. So that's pretty damn good. THey also drop the $400pa for some corporate partner employees (which i happen to be one), so i'm going for the 3.60% rate.
    Plus they have branches in CBD's of most cities so you can go in if you really want to.

    • -1

      why do you need access to branches? it seems a bit extreme to transfer all your everyday banking and credit cards to a new bank, just to setup a new mortgage.

      just get a mortgage with Reduce or HSBC, and setup direct debit .. pretty easy and never need to go to a branch and never need to use internet banking for the mortgage.

  • +1

    seems bad

  • the refinance cost (legals, rego, discharge, valuation, settlement fee, etc) can be as much as $1500. so unless you're coming from a very high rate it may not be worth the trouble. you can negotiate a lower ate with your current lender. also there are many out there that offer refinance cash bonuses such as STG to offset the refi cost.

    • Good point. Also not sure if multiple credit checks are performed or not

  • +2

    Fair warning from a customer of 16 months:

    Reduceloans are the brokers.
    Mortgage EZY (or others) does the packaging of the loan.
    Prudential finance and other non-bank lenders are doing the funding.

    This means that there is an immediate disconnect between what you sign-up for and what reduceloans advertises the next month.
    Mortgage EZY is difficult to negotiate with, for example currently offering 3.49% for new customers while keeping old customers on 3.69 for the same product.

    Refinancing from reduceloans to reduceloans may be free but incurs third party legal costs of around $800 wiping any savings from rate reduction…

    The complex structure of reduceloans financing makes it hard to renegotiate rates as opposed to something like ING or ANZ where the advertised rate can be used as a leverage.

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