My fiance and I sought pre-approval through Reduce Home Loans which seemed relatively easy (although we did have to chase for a couple weeks...) then once our offer had been accepted on our first home it went down hill from there. We had a 30 day settlement timeline and notified RHL the same day with no indication of any issues. Two weeks in, we followed up (and this took three calls and two emails) to find out where we were at in the process and how much longer approval would take to be told we should consider looking for a different provider....Two weeks before our settlement date! They had also miscalculated our funds and forgot to factor in our deposit which would have set us back a couple days. Needless to say, we dropped RHL quicksmart and went with another provider who were absolute godsends and had us further along in the approval process within 5 hours - we were laughing at the difference in service, it was unbelievable. I wouldn't recommend RHL if you're a first-home buyer!
Missing funds from final settlement and very slow service
Reduce do have very low rates, but I'd advise any new customers to be aware of the slow application time, and once settlement occurs, to check their transactions very carefully and persist if you think you're missing any funds. My home loan took 3 months to settle, from the beginning of the application process to the actual settlement date, and required a large number of documents to be sent continuously through that entire time period. Then, when the loan finally did settle, I was missing almost $600 from my final balance. Reduce continually d...enied that they had taken it, but wasting several hours on the phone to Reduce and to my old bank, over several weeks, Reduce finally discovered they'd "accidentally" charged me twice for my property valuation and also for a solicitor's fee that they were supposed to pay for. No apology or anything and I'm still waiting on these funds to be refunded...
Not what it seems
I went with reduce because of it's low rate which was at the time, the lowest in the market. At the seventh month of having the loan they increased my interest rate separately to the RBA by 0.15%. Even though they were still selling their loans at the same rate I got initially. When I queried it I was fobbed off with the 'line' your loan was funded from a different line of credit and that now costs more but the new loans don't. They then reduced it by 0.05 as my loan was more expensive than UBank and I complained so it was now equitable with UB...ank. Move forward 6 months and Reduce Home Loans called me to say I'd be receiving a voucher if I did a review for them and when I told them I'd give them a 2, for the above reasons they said I'd only get a voucher if I gave them a review of 4 or 5 so I refused. Then over the last 2 months the cash rate has dropped by 0.5% and reduce has only managed to pass on 0.45% so what initially looks like a great rate pretty much ends up as the same rate as everybody else once you factor in the random increases they do. But still the Reduce advertised rate gets the full rate cut and now sits well below my home loan rate. I have been left disappointed by reduce home loans.
The reviewer stated that an incentive was offered for this review
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Buyer beware; Getting the loan was ok, afterwards, not so
I signed for a loan with a repayment of $605 per fortnight. When I got the paperwork back after settlement the repayment was $651. I was advised the Funder uses different Calculators to the ones on the Reduce Loans site. Completely misleading. If I could afford to get out, I would.
Does not pass on rate cuts to existing customers
I was happy when I first signed up to Reduce Home Loans but soon realised that once the RBA starting cutting interest rates that existing customers are discriminated against as opposed to "new" customers. So far Reduce Home Loans have passed on pretty much all the RBA rate cuts to new customers but as an existing customer I have only received partial cuts each time. As of today (15/10/2019) its been 2 weeks since the RBA cut rates by another 0.25%. This was passed on to new customers within minutes however I have received no responses to my ema...ils asking when I can expect to hear what my reduction will be. Currently new customers can get a rate around 2.70%, I am currently on 3.09%. That says it all as to how they treat actual customers. I note that Athena and Homestar treat new and existing customers the same. I will have to contact them I think. Also, you dont deal with Reduce Home Loans after settlement, it is a third party service called Mortgage Ezy. Reduce Home Loans didnt explain this to me when I was going through the application process. The first I heard of them was when they contacted my employer out of the blue looking for financial details. You dont have direct access to the actual lender and needless to say its very difficult to get any sort of timely responses from Mortgage Ezy, don't even waste your time trying to call them. In short, be very careful before you sign up with Reduce Home Loans.
The reviewer stated that an incentive was offered for this review
Questions & Answers
Why are the fees so huge and why are so many members accusing you of bait and switch, where months after they have their loans established they get a letter advising their interest rates are going up?
Some of the comments are quite serious and places doubts on whether Reduce can then be trusted or not if they sign you up on one rate, only to increase it in a few months. Has many people experienced it?
Also people are saying their exit fees are very high. How high are they compared to others?
I am considering refinancing soon with reduce and I was wondering if there rates go up soon after changing over. I was convinced a few years ago by a broker to refinance with AFG and 2 days after my loan changed over the rate went up quite a bit and I would have been better off staying with Peoples choice. I don't want to waste my time changing if this will happen again.
I am an existing customer my rate was 2.42% it will soon reduce to 2.27%. I have not experienced any issues with rates, although I have noticed they are now advertising at 1.77% so do not reward loyalty. The process to refinance is beyond slow, frustrating and you need to jump through hoops expect it to be even months before it is finalised. So you need to weight that up.
I am also an existing customer at current rate of 3.94% IO Investor loan when current advertised is 3.19% for the same product. Contacted my manager who said that no improvements to rate are possible. I'm now looking at refinance for 2 loan products elsewhere closer to the advertised Reduce interest rate. No reward once you are signed up.
They don’t reward loyalty. It’s disgusting they advertise new loans 0.5% lower than loyal customers. Also the discharge fees are excessive!
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