What is redraw facility?
Redraw is the ability to withdraw extra repayments you've made above the minimum schedule, offering the same interest saving as offset while the money sits there, but trickier to access in a hurry.
Redraw lets you pull back any extra repayments you've made above the contractual schedule. If you've paid an extra $20,000 over the year, that $20,000 sits as 'redraw available' on top of your minimum payments and reduces interest charged in the meantime.
Mechanically the saving is identical to offset, both reduce the principal interest is calculated on. The differences are access speed and tax treatment: redraw withdrawals can take 1–3 business days at most lenders, and for investment loans, redrawing can muddle the interest-deductibility of the loan (offset doesn't).
Some lenders cap redraw withdrawals (e.g. minimum $1,000, maximum 1 free transaction per year) or charge a fee. Always confirm with the lender before relying on it as your emergency fund.
Also called
redraw facility · redraw account
Related
- Offset account: An offset account is a transaction account linked to your home loan whose balance reduces the loan amount on which inter…
- Line of credit (LOC): A line of credit home loan is a revolving facility secured against your property: you can draw down and repay up to an a…
General information only, not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.