A redraw facility is probably one of the most widely
used loan features on the market. Redraw allows you
to make additional repayments into your loan account
and then access these extra funds when necessary.
A redraw facility has two key advantages; it encourages
borrowers to make extra repayments, thereby saving
on interest costs, and it provide flexible access
to funds when they are most needed.
Apart from the most
basic variable home loans, just about all mortgage
products offer this facility. When considering a loan
with a redraw facility, think about the following:
Is there an activation
fee?
Some lenders charge
a fee of up to $300 to activate the facility on your
account. This is usually a one off fee when, and if,
you decide to use the feature.
How many free redraws are offered
per year?
Once you reach your
quota, some lenders charge a set fee for each redraw,
typically $10 to $50.
Is there a maximum number of redraws allowed per year?
Some lenders offer unlimited redraws, other products
allow a set amount.
What is the maximum redraw amount?
Usually it is the
total amount of additional repayments made but varies
with different products.
What is the minimum redraw amount?
Many lenders set no
minimum, while others have minimums of several thousand
dollars.
Depending on the fees attached, a redraw facility
works best for borrowers who need to redraw against
extra repayments infrequently. If you plan to use
your home loan as your main transaction account, a
redraw facility may not be the most appropriate product.
We
have access to over 700 loan products from Basic Home
Loans to Professional Packages.
Once
you have chosen which loan to go with, your assigned
and dedicated mortgage broker will then assist you
through the whole loan application to loan approval
and settlement process, plus, your broker will continue
to be there for you in the future when you need further
finance, property and loan related advice or assistance.
Contact
us today for a free consultation.
