They won't pass the full cut rate once you become a customer
Reduce Home Loans lure you in with a competitive rate then they never pass on anywhere near the full rate cuts. I asked them about the rate cut following RBA’s announcement and they said that the full rate cuts only benefit new customers who haven't signed up yet. If you're already a customer, they don’t pass on a full rate cut irrespective of what the RBA do.
They told me that as an existing customer I would only receive a 0.1% rate decrease out of the Reserve Bank 0.25% rate cut.
Having said that, the loan manager I talked to was nice and helpful throughout the process.
A number of points
1) You deal with a number of different entities. All of which DO NOT work well together. Reduce Loans, Mortgage Ezy, external legal solicitors, Origin MMS and a Manila help desk. Reduce it self has no control over rate cuts - you are dealing with an "invisible" entity that controls rate cuts
2) Very misleading advertising. They have not passed on the RBA rate cut to existing borrowers. They have new loans at lower rates for new customers is all. So their rates have not been "slashed".
3) Online portal is the worst I hav...
Easy to set up however rate cuts not passed in full and communication after settlement non-existent!
The process of refinancing was made quite easy and took less than two months to complete. The rate of 3.69% when we signed up was significantly lower than we were on prior. Communication with Reduce Home Loans by phone and email was usually prompt and informative.
The mortgage however is held with a different company, Mortgage Ezy. Communication with them is via an overseas call centre and I haven't spoken to the same person twice.
Shortly after our loan was approved the RBA cut rates by .25%, and this rate cut was reflected on the Reduce Hom...
Your comparison rate states 3.35% the same as the actual rate. Your small print states that some fees are not included in the comparison rate and it's based on 10k over 3 yrs. legally you MUST include all fees in the comparison rate if they can be calculated upfront ($440 as stated in your fees section) and you have used the wrong example in the small print (it must be $150,000 over 25 yrs) I wonder what the regulators will think.
Yet to cut interest rates for existing customers
Reduce Home Loans recent rate cuts currently only apply to new customers. Nothing has been advised for existing customers. You will be dealing with a number of different entities (including but not limited to, Origin Mortgage, Columbus Capital, Reduce Home Loans, Mortgage Ezy and independent solicitors) making any claim for unfair treatment difficult. Be wary that they can lock you in with a low sounding rate but not cut when the RBA cuts... They also charge you a $795 discharge fee, making an exit expensive. Not worth the punt imo until they have a proven track record.
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.
ProductReview.com.au has affiliate partnerships. These do not influence our content moderation policies in any way, though ProductReview.com.au may earn commissions for products/services purchased via affiliate links.