Frequently asked questions

If you have any questions about home loans, buying or refinancing, this is a great place to start. We’ve compiled a list of the most commonly asked questions about lending and property finance. Can’t find what you’re looking for? Give us a call on 1300 733 823 and speak directly to one of our Personal Finance Managers. Our team will be happy to answer your questions.

Am I eligible for a Reduce Home Loan?

If you are over 18 and can meet Reduce’ lending guidelines, any Australian Resident can apply for a Reduce Home Loan. Contact us for more information.

I'm self-employed. Can I borrow from Reduce?

Yes. Some of our product range is designed for self employed borrowers, Subject to meeting our lending criteria, Contact us for more information.

How do I apply for a loan?

Applying for a Home Loan with Reduce is easy, simply fill out an online inquiry with your preferred day and time to be called or call 13 Reduce (733 823), and a Reduce Home Loans Specialist will be happy to help you.

How much can I borrow?

Check out the Reduce Home Loans How Much Can I Borrow Calculator to get an estimate of what Reduce will lend you. For a more accurate estimate fill out an online inquiry of give us a call on 1300 REDUCE (733 823) your home loan specialist can even arrange a home loan pre-approval to give you the confidence needed to bid at an auction.
The minimum and maximum loan amount varies by Home Loan product, see individual home loans for details.

What are the costs involved?

Costs vary depending on the Home Loan you choose. In addition to application, valuation, and settlement fees, you need to allow for other fees such as, Stamp Duty and solicitor’s fees. You can use our Stamp Duty Calculator to find out how much Stamp Duty you’ll pay in your State or Territory.

What documentation do I need to provide?

Depending on your circumstances and the home loan you have applied for, you will generally need to supply the following:
-> Evidence of income – most recent payslip or letter from employer detailing conditions and most recent group certificate.
-> Completed and signed Reduce Home Loans Application Form
-> Certified Coloured copy of your driver’s licence
-> First Home Owner Grant application (if you’re a first home buyer)
-> Signed copy of Contract of Sale (required for purchase only)
-> 6 Months Home Loan Statements (required for refinance only)
-> Rates Notice for existing property used as security (required for refinance/equity releases only)
->Copy of last 3 months’ loan statements for any loan to be paid out (required for loan consolidation only)

Please note: We may require additional documentation depending on your circumstances.

Can I access my home loan online?

Yes. Once your loan settles with us, we will guide you through setting up your internet banking.

Can I make extra repayments?

Yes, you can make extra repayments on all of our Home Loans. However the terms and conditions relating to extra repayments vary depending on the Reduce Home Loan you choose so please see individual products or speak to you finance manager for full details.

Can I get access to the extra payments I've paid?

Yes. All Reduce Home Loans have a redraw facility. Minimum and maximum amounts and in some cases, fees may apply depending on the Reduce Home Loan you choose so please see individual products or speak to you finance manager for full details.

How long does it take to get approval?

In most cases your Home Loan manager will be able to give you a conditional approval within 48 hours. How quickly you get full approval depends on how quickly you are able to provide the necessary documentation to support your application. The most common causes of a delayed approval are normally the simplest – Unreadable Identification, missed signature etc.

How long does pre-approval last?

A pre-approval is valid for 3 months from the date of issue.

How much Stamp Duty can I expect to pay?

The Stamp Duty payable on a your new property depends on a number of factors including which State you purchase in, whether or not you are a first home buyer and whether or not you are going to live in the property or rent it out.
Check out the Reduce Stamp Duty calculator to work out how much Stamp Duty will be payable on your purchase.

How much will my repayments be?

Your minimum repayment will depend on the loan amount, if you’re paying principle and interest or just interest only. Check out the Reduce Repayments Calculator to estimate payments based on loan term, amount and interest rates.

Can I use the equity in my home as a deposit?

Yes. You can use the equity in your current property to help you purchase an investment property. Even if you have a mortgage on the property, you will likely have enough equity to purchase an investment property. Equity is the value of the difference between what your property is worth and what your mortgage loan is. For example, if you have a property valued at $800,000 with a mortgage of $400,000, you have $400,000 worth of equity. You may be able to borrow up to a certain percent of the equity to use toward investing in another property. Your home equity and anticipated rental income can help you buy another investment property sooner.

What is Lender’s Mortgage Insurance?

Lender’s Mortgage Insurance, as the name states, is insurance that protects the Lender not you as the borrower. Lender’s Mortgage Insurance (LMI) is a one off fee that normally applies to loans where the customer is borrowing more than 80% of the purchase price. LMI is scaled depending on the percentage you need to borrow (between 80 – 95%) and the amount of the loan (ie, $450,000). LMI can start from $6000 and range up to over 5% % of the loan amount. You have two options to pay this fee.

Some lenders allow you to capitalise the cost of your LMI, meaning that they will add this figure to your loan amount. For example, if you are borrowing $450,000, your LMI may work out to be around $6000. You would actually increase your loan amount to now borrow $456,000 ($450,000 + $6,000).

What is the difference between offset and redraw?

A mortgage offset account can reduce interest on your loan. Your mortgage is linked to an account into which your salary and other cash can be deposited. You can then withdraw the funds to pay your bills. For example, if you have a loan of $300,000 and have $10,000 in your offset account, the amount of interest you pay will be calculated on only $290,000 ($300,000 – $10,000). Use these savings for another deposit instead of paying off your current mortgage. Extra Repayments/Redraw Facility You can make extra repayments and create a ‘kitty’ for times when you have unexpected expenses such as plumbing or electrical repairs or for when you’re not receiving a rental income. A loan with this feature allows you to skip a mortgage repayment as long as you have enough funds in credit to cover that mortgage repayment.