What is redraw facility?
Redraw is the ability to withdraw extra repayments you've made above the minimum schedule — 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.
redraw facility · redraw account
- Offset account — An offset account is a transaction account linked to your home loan whose balance reduces the loan amount on which inter…
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.