Buying a home
Home loan cashback: What is a redraw facility?
25 February 2021
With a redraw facility, or Home Loan Cashback as we call it at Suncorp Bank, you can request access to some of the extra repayments you’ve made into your home loan if you need them. The benefit of a redraw facility is two-fold — it can motivate you to put some extra cash into your loan, and potentially provide you with some financial security. Let’s dive in to see whether a redraw facility can work for your home loan.
How does a redraw facility work?
A redraw facility allows you to request access to the extra repayments you’ve made on top of your minimum home loan repayments.
Let’s say you have a Suncorp Standard Variable Home Loan and you put in an extra $1,000 per month on top of your minimum monthly repayments. After three years of making extra repayments, you then decide to request access to those extra repayments for your bathroom renovation with Suncorp Home Loan Cashback. This is where that extra $1000 per month can come in handy.
You can access up to $36,000 from Cashback, minus one month’s worth of repayments, as the bank will keep this as a buffer. The funds drawn will then be added back to the principal amount owing on your home loan, which you’ll have to pay off over the course of your loan. There are some restrictions which may apply to Cashback access and are explained more below.
The way you structure your extra repayments is totally up to you. They could be fortnightly, monthly or as one big lump sum.
How do you access a redraw facility?
First you have to make sure you’re registered for a redraw facility. With Suncorp, you can easily register for a Home Loan Cashback facility online. You can then select whether you’d like to have access to request Cashback at any time using Internet Banking, or just apply for a one-off Cashback payment.
Before you register, it’s important to make sure you’ve got an eligible home loan. You can only access a Cashback facility with a Standard Variable or Back to Basics Loan; it isn’t available with Fixed Rate loans. Also, if your home loan is in a company name, Cashback via Internet Banking won’t be available.
Is a redraw facility right for you?
Redraw facilites can provide a level of flexibility and security, but financial discipline is key. It can be difficult to resist the temptation to draw down on funds for an upcoming holiday, but remember — this will be added to the principal amount owing on your home loan.
If you redraw frequently, you may increase the time it takes to pay back your loan. Your ability to access the funds in a redraw facility may also be restricted. For example, if you’re using Home Loan Cashback via Internet Banking, you won’t be able to make future-dated and recurring payments or one-off external transfers to accounts at other banks. To understand how Cashback restrictions may apply to you, read the Home Loan Cashback terms and conditions.*
Looking for more information about home loans? A Suncorp Bank home lending specialist can help answer your questions, and all consultations are 100% obligation-free.
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*Terms and conditions for Home Loan Cashback are contained in the Registration form you need to complete to access Home Loan Cashback, your Home Loan Credit Credit Contract and, if applicable, Internet Banking Terms and Conditions and Suncorp App Terms and Conditions. Please read these conditions carefully. Available Cashback may exclude any recent cheque, direct debit or pay at post payments and external transfers cannot be performed using online Cashback. Fixed Rate Home Loans are excluded from Cashback.
Eligibility criteria will apply to all home loan features mentioned in this article. Not all of the features suggested in this article will be available to all customers. Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs.
Home Loans are provided by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No. 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Fees, charges, terms and conditions apply and are available on request. Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Information provided is general advice only and has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product.