What is a redraw facility?

Discover how a redraw facility can help you access extra home loan repayments. Learn its benefits, common questions, and how you could use it to make the most of your home loan.

Put in the extra work on your home loan repayments, but life’s thrown a bit of a curveball at you? Did you know you can access those additional repayments with a redraw facility?

What is a redraw facility?

A redraw facility gives you the ability to access additional repayments that you’ve made on your home loan, over and above the minimum monthly repayments. You can make regular contributions or a one-off lump sum contribution to your redraw facility.

How does it impact my repayments?

Any funds in your redraw facility will reduce the balance owing on your home loan, which means you’ll pay less interest on your home loan.

What happens when I redraw from my home loan?

The additional repayments in your redraw facility can be ‘redrawn’ for any reason. For example - if you need them to cover an unexpected expense, like renovations or bills, or even a holiday. When you choose to withdraw available funds from your redraw facility, you increase your home loan balance, and may increase the time it takes to pay off your home loan. If you choose to redraw, you should consider any financial impacts, for example any tax implications. You might want to get financial advice.

Is it the same as an offset account?

Redraw facilities & offset accounts give you a way to use spare funds to reduce interest charges on your home loan balance, making it possible to pay off your home loan sooner. One key difference is a redraw facility isn’t a separate account, but a feature attached to your home loan – this means no separate BSB & Account Number.

Learn about the difference between a redraw facility and an offset account.

Please note we do not offer offset accounts at Unloan.

Is a redraw account covered by the government’s Financial Claims Scheme?

A redraw account is not covered by the Financial Claims Scheme, as it is not a deposit account.

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Calculations are not a loan approval. Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions will be set out in our loan offer, if an offer is made.

^Rates shown are inclusive of a 0.01% p.a. discount off our reference rate. On each anniversary of your loan’s settlement date, you will receive an additional discount of 0.01% per annum, up to a maximum discount of 0.30% per annum. For purchase loans with a Loan to Value Ratio (LVR) between 80.01% - 90% LVR, a lenders mortgage insurance (LMI) premium and higher interest rate apply. In some cases depending on the property’s location or type, LMI may also be required for LVR between 70.01% and 80%.

*Comparison rate is calculated on a $150,000 secured loan over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.