What is a redraw account?

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A popular way to speed up the repayment of your home loan is to have a redraw facility as part of your home loan.

A redraw facility is similar to an offset account in that you can contribute excess funds to your home loan to reduce the interest you pay.

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Some borrowers prefer to use a redraw facility because they are less tempted to spend the excess funds than they would be with an offset account.

It's possible to keep savings there until you require a lump sum, to fund a holiday for example, when you can redraw all or part of the excess. In the meantime, the positive balance works to reduce your loan. Some redraw facilities attract a fee upon withdrawing excess funds.

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Unless stated otherwise, this information has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502 and does not take into account your objectives, financial situation or needs. You should consider whether it is appropriate for you. All applications are subject to Macquarie's standard credit approval criteria.