Accessing funds available from your home loan

Can I redraw?

Chances are if you’ve made a habit of paying more than your minimum scheduled repayments, then you’ll have money available for redraw. If you have internet banking, you may be able to check what, if any, funds you’ve available to redraw.

Sometimes fixed rate loans have restrictions. Variable-rate loans are usually more flexible when it comes to redraw. Check with your banking specialist to see if it’s available with your loan or possibly switching loans if it’s a feature you would like.

How does it work?

Often online is the cheapest way to redraw funds, like through your internet banking. If online isn’t convenient for you, check if you can and how much it will cost to redraw over the phone or in a branch near you.

You also need to find out whether there's a limit as to how often and how much you can redraw.

The amount you can redraw at a time depends on how far ahead you are of your scheduled repayments. There's usually a minimum and maximum amount you can redraw. It’s important to check how much you have available to redraw before you make any commitments.

After you redraw funds from your home loan, life is as usual, and you need to make your next scheduled repayment by the due date.

The lowdown on home loan top-ups

Topping-up allows you to access the equity accrued in your house. Like a redraw, you can use a top-up for all sorts of expenditures including home improvements, consolidating debts, purchasing a new car, paying for a wedding or funding your children’s education, just to name a few.

One of the benefits of a top-up is that it can be cheaper than other types of borrowing because home loans generally have lower interest rates than personal loans or credit cards.

The amount you can borrow depends on your personal financial situation, the value of your property and the banks’ standard lending criteria.

Things to consider

Opting for a top-up on your loan means that you are increasing your mortgage. You need to consider how much this will extend the life of your loan, how much your repayments will increase by and whether you can budget for this with your other financial commitments.