Home loan redraw facilities explained

Average customer rating: 4.3/5
Written by James Hurwood
Reviewed by Stephen Zeller
Updated March 05, 2024

Expert tips for those considering a home loan redraw facility

Our General Manager of Money, Stephen Zeller, wants to empower borrowers to choose the home loan features that will benefit them based on their financial priorities and circumstances. With that in mind, he has some tips on redraw facilities and how you might want to use one.

Stephen Zeller
General Manager – Money

Want a redraw facility? You may need a certain loan type

While some lenders may offer redraw facilities on their fixed rate home loans, generally speaking you’ll need to take out a variable rate home loan if you want the option of a redraw facility. Most fixed rate loans typically either don’t allow for extra repayments or put a limit on how much you can contribute in extra repayments, making a redraw facility less useful.

Save on interest with an emergency option available

The more you make in repayments against your home loan, the less interest you’ll pay – you could even consider salary crediting against your home loan as a way of saving as much as possible on interest. The benefit of a redraw facility is that if an emergency arises, you’ll have the funds available for redraw.

Unsure if a redraw facility is for you? We can help

Home loan redraws (or any home loan feature) may not suit everyone, so make sure you have a good understanding of what works for you. If you’re still undecided as to what you think may be right for you, book in a time to chat with one of our Home Loan Specialists, who may be able to assist you with your specific needs.

What you need to know about home loan redraw facilities

What is a home loan redraw facility?

How does home loan redraw work?

What is an extra home loan repayment?

Are redraw facilities free?

Do I have to pay tax on the money I redraw?

Could a home loan redraw facility be appropriate for me?

The pros and cons of home loan redraws

The difference between redraw and offset accounts

Can I get a redraw facility on any home loan?

Meet our home loans expert, Stephen Zeller

Stephen Zeller
General Manager – Money

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.