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Mortgage redraw is very useful when you need to pull out some of your extra home loan repayments to cover emergencies or expenses.
Many loans have a minimum redraw of $500 or more, which limits the flexibility of this feature. But loans with no minimum redraw let you take out even small amounts of money. This gives you more control over your mortgage.
The loans in the table below all offer redraw without a fee, but some may specifiy a minimum redraw amount.
A mortgage with a redraw facility lets you make extra repayments on top of your minimum monthly repayments. This helps you pay off your loan faster. A redraw facility lets you withdraw those extra repayments if you need them. This is very helpful when you need some extra cash in emergencies or unforeseen circumstances.
Most redraw facilities have a limit on the minimum withdrawal amount, with most encouraging larger withdrawals.
The amount of money you redraw from a mortgage can change your debt significantly.
If your home loan requires you to make repayments of $800 every month but you make $900 repayments, you will have made extra repayments of $1,200 in a year. Because there is no minimum redraw amount, you can withdraw as little as $200. This amount will not have a significant impact on your loan because your debt is still reduced by an extra $1,000.
However, if the home loan had a minimum redraw amount of $1,000, you would be forced to withdraw that much leaving you with an extra repayment of only $200. Not having a minimum amount allows you to make your extra repayments count.
Learn more about redraw and how it differs from an offset account
Compare more mortgages from across the market
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