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Redraw Facilities

Save on interest paid and shave years off your home loan

A redraw facility is a loan feature that is usually available with variable rate home loans and some fixed rate loans. A redraw facility lets you access any extra repayments you’ve made on your home loan.

It’s not surprising that many borrowers use redraw facilities to make the most of their mortgages. However, every product has its pros and cons, so it’s important to take the following points into account before you set up a redraw facility.

Use our handy Extra Repayment Calculator to find out how much interest you could save by making extra or larger than minimum repayments.


If your minimum monthly repayments are $700 per month and you pay $900 for a period of 12 months, you will have paid an extra $2,400. A redraw facility would allow you to access the extra $2,400 you have paid.

  • If you don’t need to use your redraw facility regularly or instantly, this funding can be a lifesaver for unexpected costs or emergency expenses.
  • It is a great way to save, with any extra repayments earning the same interest rate as your mortgage. In contrast, savings accounts tend to earn far lower interest rates.
  • There may potentially be tax advantages when using a redraw facility. Interest earned on your savings account is considered income and may be taxable, whereas any interest that is saved on your home loan by having money in a redraw facility will not be subject to tax.
  • Some lenders may charge a fee to access funds available in redraw. This fee will vary between lenders and loans.
  • Some lenders may offer unlimited free redraws while some lenders may only offer a few free redraws per year. Once the limit of free redraws is exceeded the lender might charge a fee for each additional redraw.
  • Redraw facilities can have a minimum and maximum amount which can be withdrawn at any one time. While some will have no minimum set amounts, others may set the minimum redraw amount as high as $5,000.
  • Choosing between an offset account and a redraw facility on your home loan will depend on how accessible you need your money to be. You should also consider any associated bank fees with each facility.
  • An offset account is a separate deposit account, whereas a redraw facility is not a separate account, but a feature attached to your loan.

If you are still unsure whether to choose an offset account or a redraw facility, our friendly team is happy to guide you through your decision. We’ll offer expert advice tailored to your personal and financial circumstances.