Redraw Facilities at ME.

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Important information.

The information applies to your redraw if you have the following home loan products:

EconoME Home Loan
CompleteME Home Loan

Don’t have one of these products, or not sure how find your type of home loan?

What is redraw?

Redraw is a variable home loan product feature that gives you access to additional payments you have made on your loan above the scheduled minimum. Additional payments can be in the form of lump sum deposits or by making higher recurring repayments than the minimum. These additional payments can help to reduce the balance of your home loan and the interest you pay on it.

While the redraw feature is designed for infrequent use, it can be handy for those times you face an unexpected bill, or you need access to money for a big ticket item, like a getaway, or adding that much needed second bathroom.

Where is redraw available?

The redraw feature is available on Variable Rate Home Loans, however, if you have a Fixed Rate Home Loan this feature will only be available once your fixed rate term expires and switches to the variable rate.

If you already had available money in redraw prior to starting the fixed rate period, the redraw amount will need to be reduced completely – you can do this by moving it all to a separate account (in which case your fixed rate loan balance will be higher) or you can reduce your home loan limit by the amount of the redraw prior to commencing your fixed rate.

You can make extra payments up to $10,000 per year into a CompleteME or EconoME fixed rate loan. Going above this amount may attract a fee. However, you won’t be able to access the redraw amount until the end of that fixed rate period.

Offset account.

There are other ways to reduce interest payable on your CompleteME Home Loan – having an offset account can be a good way to reduce the interest charged on your variable home loan while also giving you access to your money whenever you need it.

With an offset facility linked to one of ME’s transaction accounts you can make deposits or withdrawals, as you would with a regular transaction account, meaning an offset account is often more suitable if you plan on using - and needing access to - your funds more regularly.

Learn more about an Offset Account

Benefits

What are the benefits of being in advance and having redraw available?

Interest Savings.

Any money available for you to redraw reduces the balance of your home loan, so you’ll be paying less interest on your home loan.

Paying your loan off sooner.

You can make additional lump sum repayments or regularly pay more than your minimum required repayment.

This will build up the balance you have available to withdraw later via the redraw, and may reduce the time it takes to pay off your home loan.

So how does redraw work?

You can build an available redraw balance either by paying a regular amount above your scheduled minimum repayment or via lump sum payments into your loan. Note, minimum repayments are based upon the scheduled balance of the loan at all times, however you can nominate a higher repayment at any time when you have a variable rate.

Scenario 3:
additional repayment as a lump sum; reduced repayments; redraw unavailable.

John made a $100,000 lump sum payment in year 10 and requested to reduce the minimum repayments in line with the actual balance. This means John's new scheduled balance is reduced to $150,000 and the new minimum repayment will be based on $150,000.

Because John reduced his repayments in line with the new balance, he has no redraw available.

Frequently asked questions.

What’s an offset account?

An offset account is a transaction account that’s linked to your variable home loan – but instead of earning interest, the money in the offset account acts to reduce the interest your loan accumulates. With on offset account you can make deposits or withdrawals, as you would with a regular transaction account, meaning an offset account is often more suitable if you plan on using - and needing access to - your funds more regularly.

What’s the difference between an offset facility(account) and redraw?

A redraw facility works differently to an offset account. With a redraw facility you can make additional payments to reduce the outstanding balance of your mortgage, which in turn reduces the amount of interest you pay on your home loan.

Conversely, in the case of an offset account, the balance of the offset account is subtracted from the outstanding balance of your mortgage, and you only pay interest on this difference.

Should I have an offset facility or redraw?

Depending on the product you have with ME, both of these features can be available with your home loan. You’ll need to remember that with an offset facility you won’t have the ability to reduce your regular repayments.

Paying extra money into your home loan and having available redraw can work for customers looking to reduce their repayments or access cash in the future for larger purchases or expenses. Keep in mind that you’ll need to ensure you can afford the increase to your repayments if you access available redraw.