How Redraw Facility Works?

A redraw facility lets you make additional repayments to reduce your variable rate home loan balance and save on interest. If you pay more than your minimum scheduled repayments, then you'll have money available to redraw from your home loan. The redraw facility is a common feature of many home loans.

Is it better to have money in offset or redraw?

While an offset account often offers more accessibility and flexibility compared than a redraw facility, home loans that come with offset accounts generally have higher interest rates than loans that only have a redraw facility.

Can I use my redraw to pay my mortgage?

To be able to use a redraw facility, you first need to make additional payments on top of your minimum loan repayment schedule. This includes one-off lump sum repayments or regularly paying a certain amount – say $50 or $100 – more than the required minimum repayment.