In operation since 2010, Reduce is a dedicated home loans provider and offers no other financial services. They have a wide choice of home loans to suit everyone including variable, fixed, and cashback home loans for both owner occupied homes and investment properties. Most come with the principle and interest repayments while some have the interest only option.
The entire Reduce application process is online, with no branch network, which is probably another reason they can offer competitively low interest rates compared to most brick and mortar banks. They have won multiple awards including Money Magazine's Best of the Best Cheapest Home Loans every year from 2016 – 2021 for their work in disrupting Australia's home loan space.
Reduce are regulated by the Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA). It is owned and operated by Australians.
Product and service offerings
Reduce have a comprehensive choice of variable and fixed rates on owner occupied and investment loans.
Owner occupied loans
- Variable rate
- Fixed rate
- 80% LVR available on all loans
- Up to 90% with LMI
- Choice of fixed rate periods range from 1 - 5 years
- No interest-only loans
- All loans have a fee
- No construction loans on fixed rate
- Cashback
- You can get cashback on purchases and refinances
- Offset available for 100%
- Full, free redraw facility
- Range of 60% to 80% LVR
- Up to 90% with LMI on some choices
Investment property loans
- Variable rate
- LVR ranges from 60% to 80%
- Up t0 90% LVR with LMI on some loans
- Offset available
- Extra repayment and redraw on all choices
- No construction loans
- Fixed rate
- 80% LVR available on all loans
- Up to 90% with LMI
- Choice of fixed rate periods range from 1 - 5 years
- Interest-only available
- All loans have a fee
- No construction loans
- Cashback
- Cashback offered on purchases and refinances
- Offset available
- Full, free redraw facility
- Range of 70% to 80% LVR
- Up to 90% with LMI on some choices
- Interest-only available
- Construction loans available
What makes Reduce Home Loans different
- Excellent record on consistently low interest rates, especially for variable rate loans.
- Allows free extra repayments so you can pay off your loan earlier. Variable rate loans allow for unlimited repayments while there are caps on some fixed rate home loans.
- Repayment schedules are flexible. You can align repayments with your pay cycle and pay on a monthly, fortnightly, or weekly schedule.
Record on rate cuts
Reduce has consistently offered low interest rates on their products. This has enabled them to win the Best Cheapest Home Loans awards from the Money Magazine every year from 2016 – 2021. There is no way they can do that without passing on the RBA’s cash rate cuts to consumers.
Eligibility
To qualify for a home loan you must:
- Be over 18 years old
- Be an Australian Resident
Documents you need
Depending on home loan and your personal circumstances you may need:
- Evidence of income. Recent payslips or a letter from your employer with terms of employment and most recent group certificate.
- Completed and signed Reduce Home Loans Application Form.
- Personal identification, e.g. a certified coloured copy of driver’s licence.
- First Home Owner Grant application if you are a first home buyer.
- Signed copy of Contract of Sale for those buying a home.
- Home loan statements covering the last 6 months if you are refinancing.
- Rates notice for an existing property you are using as security for both refinance and equity releases.
- Copy of last 3 months’ loan statements in case of loan.
- Other miscellaneous documents may be necessary depending on individual circumstances.
Pros and cons
Here are the pros and cons of Reduce Home Loans in comparison with other lenders’ offerings.
Pros
- Wide choice for owner occupied and investment property loans.
- Consistently low interest rates.
- Convenient online loan management.
- Flexibility of loan options and repayment terms.
- Home loans suitable for borrowers with smaller deposits.
- Some loans have low fees.
- Self-employed people are eligible for some loan products.
- Self Managed Super Fund (SMSF) and alt doc loans are available.
- People with poor credit may apply.
Cons
- There are no branches.
- Loans come with application fees.
- Higher interest rates on SMSF, alt doc loans, and for people with an adverse credit record.
