Leading Melbourne Mortgage Broker What If We Finance says "almost all Home Loans have access to Home Loan Redraw. This reflects the increasing popularity of Home Loan redraw with borrowers".

In summary a Home Loan Redraw facility allows a borrower to make extra repayments in to their Home Loan and when required redraw/withdraw that money for use at a future point in time. There is no limit or restriction on what the funds can be used for.

One of the key benefits to Home Loan borrowers is that Redraw allows borrowers to reduce the total interest payable over the life of the loan because they are making extra repayments to their home loan. So, if you make an extra $2,000 in repayments over a year, then in simple terms, your extra repayment of $2,000 will reduce the interest payable on the total outstanding amount of your mortgage.

Melbourne Mortgage Broker What If We Finance says "Home Loan Redraw can be used effectively to significantly reduce your Home Loan life and interest. Facilities with free redraw and no minimum redraw amounts can allow you to have your salary, rent etc paid in to these accounts and one client reduced their home loan term by 5 years with this simple strategy."

The other advantage of the redraw facility is that you will still have access to these funds whenever you like. So, if you want to go on a holiday, or buy a new car, you can use the extra funds available in your redraw facility.

Redraw facilities can differ from one lender to another. Some of the aspects you need to consider when taking out a redraw facility is:

Does the lender charge an activation fee on the Redraw facility? Some lenders can charge fees up to $300 to provide a Home Loan Redraw facility

Does you receive free Home Loan Redraw? Some lenders charge up to $50 per redraw.

Is there a minimum amount of Home Loan Redraw?

Is there a limit to the total value redraws I can make?

If used correctly Home Loan Redraw can reduce your Home Loan interest and loan term significantly. Contact your Mortgage Broker for further information.