One of the benefits of making extra repayments on your home loan is being able to redraw some of those funds. So you can make the most of this feature, we explain how it works and how it can help you achieve small or large goals.
What is redraw?
Let’s say you’ve made a habit of paying more than your minimum scheduled home loan repayments. This means you’ll have money available to take back out – if you want to.
This process is known as redraw. You can use this money to pay for sudden expenses, or planned things such as:
- school fees
- a new car.
Keep in mind there are times when redraw might not be available. For example:
- if you have a fixed rate loan, redraw is only available at the end of the fixed rate period (i.e. when the rate becomes variable)
- you can’t access redraw for construction loans or NAB Defence Force Home Loans.
Features of redraw
We don’t charge a redraw fee, so you can redraw as little as $500 or up to $150,000 per day – as often as you like. You can access all the funds you’re ahead by, minus one month’s scheduled repayment.
After you redraw money from your home loan, you must continue to make your regular repayments.
It’s important to remember that the interest part of your repayments will increase because you’re now paying interest on a higher loan amount.
What are the benefits of redraw?
Knowing you have a source of finance just sitting there, in case you need it, can give you simple peace of mind. Plus, this money accumulates over time and is easy to access.
How do I use a redraw facility?
You can use internet banking to see if redraw is available with your loan and how much you have available to use. If you’re all good to go, you can redraw straight away.
If you’d like to discuss your redraw options, chat to one of our banking specialists in branch, or give us a call on 13 22 65.
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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.