Your “Savings Bucket”
Inside Your Mortgage
A redraw facility allows you to access any extra repayments you have made above the minimum monthly requirement — so your money reduces your loan balance and interest charge, while remaining accessible whenever you need it.
How a redraw facility works
Think of a redraw facility as a "savings bucket" inside your mortgage. When you put extra money in, three things happen simultaneously.
Loan balance drops immediately
The extra payment reduces your outstanding principal the moment it arrives, lowering what you owe.
Interest charged drops
Interest is calculated on the lower balance — so every extra dollar is saving you money from day one.
Redraw balance ready to use
The extra money sits as a 'Redraw Balance' — available to withdraw for a renovation, car, or emergency whenever you need it.
4 steps to applying for and using redraw
From loan selection to making your first redraw — here is exactly how we guide you through the process.
Loan feature confirmation
Not all loans include redraw — especially some fixed-rate products. During our initial consultation, we ensure the loan product selected for you includes an 'unlimited' or 'low-fee' redraw feature so you aren't penalised for being proactive with your payments.
Setting up extra repayments
Once your loan settles, increase your repayments by setting up a recurring direct debit above the minimum, or by dropping lump sums (like a tax return or work bonus) whenever you like.
Activating online access
In 2026, most lenders allow you to manage your redraw through their mobile app. You usually need to 'activate' the redraw feature in your portal settings — this lets you see exactly how much available redraw you have at any time.
Making a redraw request
Log in and transfer funds from your loan account back to your everyday transaction account. Most major Australian banks now process these transfers instantly, though some smaller lenders may take 1–2 business days.
How does a redraw facility work in practice?
From your first extra repayment to withdrawing funds — here is the full lifecycle of a redraw facility.
Activate the feature
Most loans include redraw by default, but confirm it's enabled — some require a short form or portal activation.
Make extra payments
Deposit lump sums (e.g., tax refund, bonus) or increase fortnightly repayments. Minimums often apply — commonly $100 or more.
Principal reduces immediately
Your loan balance drops immediately. Example: on a $500,000 loan at 6% interest, a $10,000 extra payment saves approximately $600 per year in interest.
Request a redraw
Request a withdrawal. Lenders typically limit redraw to verified extra repayments above the minimum, tracked separately from your required balance.
Interest recalculates
Withdrawn funds increase your principal again — but you've already enjoyed the interest savings during the period those funds were parked in the loan.
Quick example — $10,000 extra on a $500,000 loan at 6%
A $10,000 extra payment saves approximately $600 per year in interest — and that money is still accessible via redraw whenever you need it. The interest saving begins the day the payment is made.
Calculate your redraw interest savings
See exactly how much a lump-sum extra repayment saves you in total interest and years — while remaining fully accessible via redraw.
Redraw interest savings calculator
Your redraw impact
✓ Your $10,000 extra payment saves $600 per year in interest — and you can still access it via redraw.
Why a redraw facility is a game-changer
Redraw facility loans offer interest savings and flexibility without complexity — here are the six key reasons borrowers love them.
Massive interest savings
Every extra dollar works 24/7 to cut interest. On a 30-year $600k loan at 6%, $50k extra could shave years off your term.
Forced discipline
Encourages extra repayments without the temptation to spend — your money is reducing your loan instead of sitting idle.
Emergency buffer
Access cash without taking out new loans or credit cards — your redraw balance acts as a financial safety net.
No separate account needed
Simplifies your banking — one login for your loan and savings, rather than managing multiple accounts.
Refinancing perk
Transfer your redraw balance when switching lenders (with approval) — your savings aren't lost when you move.
Investment strategy
For negatively geared properties, extra payments reduce non-deductible interest and improve your overall tax position.
Who qualifies for a redraw facility?
Redraw facilities are available on most variable home loans. Here's what lenders typically look for.
How to set up a redraw facility
Setting up redraw is straightforward for most borrowers — here's what to expect.
Contact your lender or broker
Let them know you want to enable the redraw feature on your existing home loan.
Fill out the application form
Most lenders have moved this online — it takes around 5 minutes through your banking portal.
Link via app or banking portal
Connect redraw to your transaction account so transfers can be made instantly when needed.
Go live — instantly to 48 hours
Most activations are instant for major banks. Some smaller lenders may take up to 48 hours to process.
Who should get a redraw facility loan?
The best setup depends on your finances, loan type, and goals. Here is who benefits most — and who should consider alternatives.
Ideal for
Avoid if...
Redraw your loan strategy
Redraw facility loans are a game-changer for Australian borrowers — offering interest savings and flexibility without complexity. But the best setup depends on your finances, lender, loan type, and goals. Speak with a Kubaer Finance broker to find the right structure for your situation.
Common questions
Everything homeowners ask about redraw facilities in Australia.