💸 Is Putting My Next Month’s Mortgage Payment Into Redraw Like Paying Weekly?
💸 Is Putting My Next Month’s Mortgage Payment Into Redraw Like Paying Weekly?
If you’re ahead on your mortgage or thinking about ways to get ahead, you might be wondering:
“If I put my next month’s mortgage repayment into the redraw facility, is that the same as paying my mortgage weekly?”
It’s a great question — and the answer is: sort of… but even better in some ways.
Let’s break it down.
🧠What Is a Redraw Facility?
A redraw facility is a feature on many variable-rate home loans that lets you make extra repayments and then access that money later if needed. It’s a flexible way to get ahead on your loan while still keeping your cash accessible.
đź’ˇ What Happens When You Put Extra Into Redraw?
When you deposit extra money into your loan account via the redraw facility, here’s what happens:
That money reduces your loan balance for interest calculation purposes.
Since interest is calculated daily, you immediately start paying less interest.
You’re effectively getting ahead on your mortgage, without permanently locking away those funds.
đź“… Is It the Same as Paying Weekly?
Not exactly — but the financial effect can be similar (or better).
Let’s compare:
The benefit of putting money into your redraw upfront is that it sits there longer, working harder to reduce your interest.
âś… Pros of Using Redraw Like This
Immediate interest savings
Flexible access to your money in case of emergencies
Keeps you ahead of your repayment schedule
Can help build a buffer for things like rate rises or big expenses
🚨 A Few Things to Watch Out For
Your lender may still expect your scheduled repayment, even if you're ahead.
Some lenders restrict redraw access (e.g. minimum redraw amounts, fees, or delays).
Fixed-rate loans often don’t allow redraws or limit extra repayments — check the fine print.
🧮 Want to See How Much You Can Save?
Even putting one extra repayment into your loan each month could save thousands in interest over the life of the loan. If you want me to run some tailored numbers based on your loan balance, interest rate, and goals — just reach out!
🏡 Final Thought
Using your redraw facility to stay ahead on your mortgage is one of the smartest strategies for saving interest, reducing your loan term, and keeping financial flexibility.
It’s not exactly the same as weekly repayments — in some cases, it’s even more effective.
Got questions or want to review your loan structure?
Book your free discovery call with me today:
👉 www.bestff.com.au/book-your-complimentary-discovery-call
