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Reduce Home Loans: 3 Years Fixed Owner Occupied P&I 2.79% (CR 3.04%)

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Reduce Home Loans: 3 Years Fixed Owner Occupied P&I 2.79% (CR 3.04%)
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LUnderdog on 27/09/2019 - 11:10 reduceloans.com.au (553 clicks)
Last edited 27/09/2019 - 13:12

The RBA may reduce the cash rate at the meeting on Tuesday (1/10/19), so you may see a further interest rate reduction on this home loan product.

Features include:

Up to 80% LVR for purchase of refinance
Full redraw facility
100% Offset available (additional $10 per month)
$0 application fee
$0 establishment fee
$250 (estimated) valuation fee
$275 (estimated) legal fees

I have received the below confirmation from Reduce Home Loans -

Estimated set up costs are

  • Nil application fee,
  • Nil settlement fee.
  • Valuation fee $250-00 covers cost to $250.
  • Solicitors fee of $297-00. Government charges and solicitors and solicitors disbursement apply.
  • Funders fee $150-00.

We can waive fees of $697 and the rate will be 2.89%.

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closed Comments

  • thydzik on 27/09/2019 - 11:44
    +1

    It's most likely already factoring in a rate cut on Tuesday.

    • z0idberg on 27/09/2019 - 11:55
      +2

      Absolutely it will be factored in and I would be shocked if this moved at all following an announcement either direction.

      Fixed rates across the board look to be factoring a drop soon and possibly another possibly early next year.

      That being said this looks to be a very nice fixed rate esp. including offset account.

      • knobbs on 27/09/2019 - 11:59
        +2

        First time I have ever seen an offset included with fixed rate.

        • thydzik on 27/09/2019 - 12:02
          -1

          I think that's only if you do a loan split with half variable, half fixed.

          • Underdog on 27/09/2019 - 13:10

            @thydzik: I have confirmed and the offset is available on the fixed loan (no loan split required).

        • mshanann on 27/09/2019 - 15:54

          @knobbs3 - They used to do it all the time. I got a CUA Fixed Rate product 5 years back with 100% offset and no cap.

          Nowadays most fixed rate products with offsets have a cap - for example max $50k offset. Meaning if you had say 500k loan, and 300k in offset account, only 50k of that 300 would offset interest.

  • stockastics on 27/09/2019 - 12:20
    +1

    Optional offset account is $10/month

    • paaj on 27/09/2019 - 14:56
      +2

      How is it costing the bank $10 a month to assign an offset account? Some of these fees just don't sound legit in the modern world.

      • Underdog on 27/09/2019 - 15:17
        +1

        Don't forget Reduce Home Loans are a non-bank institution.

        I believe they use ANZ for their offset accounts.

        They would more than likely pay a fee to ANZ for the service.

        I don't agree with banks charging offset fees.

      • ely on 27/09/2019 - 16:30

        The cost of things is generally based on the benefit that it provides, not the cost of provision. Cost of provision will generally be the minimum that you'll be charged for something, not the max.

        Personally I derive no benefit from an offset account, so I'm not willing to pay anything for it. Pay goes directly on to the mortgage, more or less all expenses go to credit cards, and I redraw monthly to pay off the credit cards. Offset is redundant.

        This doesn't work for investment properties, or if you're planning on turning your owner occupied property into an investment property though, because the law is insane. If those apply, get an offset.

  • onetwothreefour on 27/09/2019 - 12:21
    +1

    I'm currently at 3.24% variable with tictoc, this deal would be hard not to consider if you can really get an offset with a 100% fixed loan.

    • stockastics on 27/09/2019 - 15:00
      -1

      offset only with variable..

    • ely on 27/09/2019 - 16:31

      Hassle them for a discount. Just settled with TicToc on 2.99% (fully variable). Not expecting to get much additional discount from a cut if the RBA drops again though, given that 8bp of that rate was dropped out of cycle with the last cut.

      • onetwothreefour on 27/09/2019 - 16:39

        Yeah I think I will if there is a rate cut next week, not sure I'll be able to get the same as a new customer but they have to give me something better than they are now.

  • mshanann on 27/09/2019 - 12:40

    For the Home Owners Dream 3 year fixed where the borrower pays an upfront fee of $697 then a corresponding loyalty discount of 0.20% p.a. off the Home Owners Dream 3 year fixed rate (at that time) will automatically apply after the 5th anniversary of the loan.

    • Underdog on 27/09/2019 - 13:11
      +2

      I received this email from Reduce Home Loans -

      Estimated set up costs are

      • Nil application fee,
      • Nil settlement fee.
      • Valuation fee $250-00 covers cost to $250.
      • Solicitors fee of $297-00. Government charges and solicitors and solicitors disbursement apply.
      • Funders fee $150-00.

      We can waive fees of $697 and the rate will be 2.89%.

      • stockastics on 27/09/2019 - 15:00

        Nah, I am sure you can negotiate at 2.79% and get the fees waived..

        • Underdog on 27/09/2019 - 15:18

          You might have luck with this, but I think it would depend on the size of your loan.

      • tg on 27/09/2019 - 17:31

        Why $250-00 but not $250.00?

  • Ohgeelowk on 27/09/2019 - 20:34

    3.04 comparison rate, homestar offer 3.05
    variable with offset. With the RBA cash rate potentially looking at another drop next week, personally I wouldn't be looking at fixed rates just yet

  • Axytrix on 01/10/2019 - 15:03
    +1

    Since the RBA cut minutes ago, their Owner Occupier has gone from 2.97% to 2.77%.

    • pyramid on 01/10/2019 - 15:03

      Wow…they would be already anticipating rate cut.

    • Underdog on 01/10/2019 - 15:56
      +1

      It would be best to stick with a variable loan for the next few years.

      The only thing that gripes me with Reduce Home Loans (as per the online reviews), is that they increase your rate (irrespective of the RBA rate cuts) and do not match the advertised rate.

      • macrocephalic on 08/10/2019 - 15:10

        The thing that annoys me about them is the exit fees. Their rates don't go down as quick as the official rate, so after a few years your rate won't be all that favourable, and the exit fees make you pause before jumping ship.

        Luckily my mortgage is quite small now, otherwise I'd be going somewhere else - but it's not worth paying the fees now for the small amount I have owing.

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