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# Owner Occupied Home Loan 2.77% @ Reduce Home Loans

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Since the RBA cut interest rates to a record low 0.75% this afternoon, Reduce Loans have slashed their variable home loan rate by 0.2% making it a very attractive 2.79% Comparison Rate.

Loan: RATE LOVERS
Max LVR: 90% - add 0.22% LMI or 80%.
Min Loan: \$50,000
Max Loan: \$850,000: 70.01% - 80% LVR. \$1,500,000: <70% LVR.
Offset account: Optional offset account for \$10 month.
No Upfront or Ongoing Fees: The loan has no application fees, annual, monthly fees or settlement fees.
Third Party Valuation Fee: No fee up to \$250 (Loan amounts under \$200,000 incur a valuation fee at cost, estimate \$250)
Third Party Legal Fees: No fee up to \$297 (Loans amounts under \$200,000 incur legal fees at cost, estimate \$297)
Discharge Fee: \$895

Would like to know if anyone amongst the community have had any experience with these guys.

## Related Stores

Reduce Home Loans

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Min/Max Loan: \$850,000: 70.01% - 80% LVR. \$1,500,000: <70% LVR.

what does this mean ?

min 850k borrowing ?

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LVR = Loan to Value
example: You bought a house for \$100,000 but you've saved up \$10,000 which you will use as a deposit to purchase the house, so the mortgage borrow amount will be \$90,000 meaning LVR = (90,000 / 100,000) x 100 = %90

Why not pass on the full reduction of 0.25%?

Profit

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2.50% and we have a deal!

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Low Rider Variable
Owner Occupied Home Loan
2.69% p.a. Variable
2.71% p.a. Comparison* (1)

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It will have approx \$1k in fees and other charges…

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It's identical however includes an Upfront Fee of \$1,170 and Max LVR of 80%

Only difference I can see is the setup cost.
\$1170 setup cost for the 2.69% rate

Rate lovers option by comparison is \$0 setup cost for 2.77%

on a \$500k loan over 30 years the difference is \$21 a month.
which means 55 months to pay back that initial setup cost on the savings. Not counting the time value of money.

So I have no idea why you would take that option?

I signed up a loan a year ago through them. Easy to deal with and low fees. The loan i have is a white label adelaide bank product. very basic portal but who cares. cheap rates!

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Thanks for sharing your experience! Have you seen the rate cuts throughout the course of the loan? Cheers!

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good question, I'd like to know also please @rxjb

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I started a year ago on 3.48 which was market leading. I am currently on 3.30. I will be looking to refinance via reduce to get the new rate. From what i understand if its the same provider, i wont be able to move.

Please note the broker is based in QLD and therefore all discussions are done via phone/email.

In addition, there is a third party MEZY Loans who provides the customer service once the loan is up and running.

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I don't see the Max LVR 90% option. It says 80% only

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Go HERE scroll to title Owner Occupier Loans see within the table

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Thanks

Rate cut only for the new customers. Discharge fee of \$895 is well above market average

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Where are you seeing the discharge fee?

there is a section "Compare us with the Big 4 and you could save" which has \$0 for discharge fee for the Rate Lovers varibale product (and details of the big 4 discharge fees).

screenshot:
https://ibb.co/WVYfs1r

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It is in my contract.

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OK thanks.
I'll see what they say directly about new customers, but the lack of cuts for existing customers sucks.

I'm leaning heavily Athenas way now given full cuts to new and existing as well as no fees.

No offset, but unlimited pay in and redraw is close enough to the same thing if they stay fair on passing on rates without other gotchas.

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@z0idberg: If you decide to go with RH make sure you check every figure. They promised not to charge settlement fee and refund evaluation fee. However they did the opposite. I had to follow up with them again and again. In the end I was so tired that I skipped the discharge fee. Looking back I wish I would go with someone else instead.

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@olgagodo: Thanks again for the feedback, very much appreciated.

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suitable for the self-employed?

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I’d love to hear anyone’s experience with Reduce?

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For 90% LVR, does it mean the interest rate is 0.22% more meaning it will be 2.99%? I tried asking on the website chat but they just directed me to contact their helpline. Thanks!

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Yes I believe you are correct in saying if you are 80% to 90% LVR your interest rate would increase by 0.22%. Of course in addition to the cost of Lenders Mortgage Insurance. I'd try to confirm this with them.

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Has anyone had luck applying for the low rider loan (2.69%) and getting the upfront fees waived (\$1170)?

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I am with reduced. They are not as bad as many Banks but they are not best as they used to be a few years back.
They did increase my interest rates out of RBA cycles and as being an existing customer I dont get what they advertise.
Last RBA cut they passed 0.20% instead of 0.25%
I also have this huge discharge fees of \$850+ so I need to check if by refinancing to Athena I will be ahead or not one day.

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Anyone applied and been approved, how long is the process?

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I applied 2 weeks ago.

Provided all documents and still waiting for approval.

The broker promised me conditional approval by 72 hours and approval (pending valuation) by 1 week.

I emailed to follow up last week (1 week after applying) and I have yet to receive a reply.

Not happy with the service so far.

But I do understand that they would be busy with the latest rate cut and increased loan applications.

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it's been 11 days since I applied.

when I spoke to them, they did mention it could take 30 days.

but i'm hoping to settle before my next package fee comes up.

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A lot of back and forth with the application process, as they are only a broker takes longer.

its been 30 days and they have only now ordered the valuation.

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Another negative, they use CBRE and the valuations come back notoriously low

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For someone who is new to all this business, could you give a quick explainer on what's wrong with the low valuation?

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Banks lend on a percentage of equity (the property) you put up, normally 80%.
The way to determine the value of the property is a bank valuation, lower valuation means less money you can borrow. Which means either you reduce your existing lending with other funds, or skip the lender altogether.

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Got it, thanks. How low it can go, compared to the sale price?

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@leon99: if its a new lend, you are fairly safe, since the valuation should be fairly close to your purchase price, since purchase price is market price at the time.

it more affects refinancing, when valuations change over time.

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its been over 2 months since applying, still haven't been approved.

anyone else in the same situation?

given there was no cut in December, rates are still competitive.

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Any updates? I just submitted an application on Wednesday and settlement is next month, so 2 months+ will be too slow for me.

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Mines a bit if a unique situation which I think is why it's taking so long to approve.

Reduce is good, but who ever the end lender is sounds incompetent.