Redraw Facilities: What They Are and When to Use Them
Christian Stevens, Mortgage Broker
Published December 1, 2025, 1:19 P.M
Learn how redraw facilities can give you access to extra repayments on your home loan. Flintgroup.au guides borrowers on using redraw effectively, balancing interest savings, flexibility, and long-term financial control.
Key Facts
- Redraw lets you access extra repayments made above your minimum home loan obligations.
- Unlike offset accounts, funds in redraw remain tied directly to your loan principal.
- Ideal for disciplined borrowers seeking to minimise interest while retaining access to their money.
- Flint helps borrowers optimise redraw features to improve cash flow, flexibility, and loan efficiency.
Redraw Facilities: What They Are and When to Use Them
A redraw facility is one of the most powerful home loan tools for Australian borrowers. It allows you to access any additional repayments made on your mortgage, giving you the ability to manage long-term savings while keeping short-term flexibility.
It’s important to understand how redraw differs from an offset account to make informed financial decisions.
What Is a Redraw Facility?
A redraw facility provides access to any extra payments you’ve made beyond your scheduled repayments.
If you’ve contributed additional lump sums, made higher monthly payments, or simply maintained a disciplined repayment routine, redraw allows you to withdraw those funds when necessary — without taking out a separate loan.
Key Benefits of Redraw
- Interest savings: Extra repayments reduce the principal balance faster, lowering total interest over the life of your loan.
- Emergency access: You can retrieve funds if needed, without refinancing or taking on additional credit.
- Flexible budgeting: Pay more when possible, but retain access to funds for unexpected expenses.
- No separate account required: Extra payments in your loan earn an effective return equal to your mortgage interest rate, often higher than traditional savings accounts.
Who Benefits Most from Redraw?
Redraw is especially useful for:
- Disciplined savers: Reduce your loan balance while retaining access to funds for flexibility.
- Budget-conscious borrowers: Provides a safety net if you cannot lock away savings long-term.
- Young families or first home buyers: Offers a financial buffer for renovations, life events, or emergencies.
Things to Know Before Using Redraw
- Availability varies: Some fixed loans may not include redraw, or may limit access.
- Withdrawal restrictions: Lenders can cap redraw amounts per transaction or impose processing delays.
- Not a true savings account: Redraw remains part of your mortgage; access may be affected if repayments fall behind.
- Hardship limitations: Lenders may restrict redraw in cases of late payments or financial hardship.
Redraw vs Offset: What’s the Difference?
Feature | Redraw Facility | Offset Account |
Linked to Loan | Yes | Yes |
Money Reduces Principal? | Yes | No (separate account) |
Accessibility | Moderate (via lender) | High (like a transaction account) |
Withdraw Anytime? | Limited in some cases | Yes, anytime |
Typically Available On | Variable rate loans | Variable and some fixed packages |
Both tools can complement each other depending on your loan structure and financial strategy.
📞 Want to Make the Most of Your Loan's Redraw Option?
Flint helps you maximize your redraw facility to fit your financial goals:
- Check if your current or future loan supports redraw.
- Compare lender rules and fees for redraw access.
- Create a loan strategy that balances flexibility, savings, and long-term interest reduction.
Chat with Flint today to see how redraw can help you get ahead on your mortgage while keeping funds accessible when life requires it.
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