January 31, 2016
The vast majority of variable rate loans have the redraw feature, few fixed rate loans have this feature (but some do).
Redraw allows you to redraw from your home loan repayments you have made over and above the minimum.
That is, you are able to draw back the advance payments you have made to your loan. You may use these funds for any worthwhile personal purposes, for example:
- Home improvements
- Updating the car
- A holiday
- Buying shares
Redraw allows you to accelerate the repayments on your home loan, with the comfort knowing that if something unexpected occurs you can withdraw your advance payments.
This will help you to pay your loan off quicker.
Lenders, may or may not charge you a redraw fee and may or may not have a minimum amount that can be redrawn.
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