What happens to redraw when I refinance?

Your redraw is not an extra savings account

Extra repayments have already reduced the debt you owe. Available redraw describes money the existing contract may let you borrow again. When that loan is paid out, its redraw facility ends. Refinancing the actual amount owing does not recreate that access automatically.

Worked example: $400,000 owing and $30,000 redraw

Assume your actual outstanding loan balance is $400,000 and a further $30,000 is available to redraw. Ignore fees and accrued settlement interest for this example.

Refinance $400,000: the old debt is paid out. You have a $400,000 new mortgage and no separately preserved $30,000 cash balance. You have not lost a deposit; the previous extra payments already reduced your debt.

Request $430,000 and retain $30,000: if approved, $400,000 pays out the existing mortgage and the surplus can be directed as agreed at settlement. You owe $430,000 and hold $30,000 cash. If all of that cash stays in a linked 100% offset, interest is initially calculated on $400,000, but the contractual debt remains $430,000.

Why the agreed loan amount matters before settlement

If you redraw $30,000 just before settlement, the old balance increases to $430,000. A refinance approved for only $400,000 now has a funding shortfall before fees. Coordinate the payout, approved facility and destination of any surplus before moving money.

ANZ Plus explicitly explains that redraw access you want to retain must be included in the amount requested. Other lenders have their own funding and surplus instructions; check the actual approval.

Confirm these four amounts

• Current actual loan balance and final payout figure, including accrued interest and discharge costs.
• Available redraw separately from the amount owing.
• New approved loan amount and its LVR, rate and minimum repayment.
• Where surplus funds will land and whether the intended offset is linked and fully effective.

Should you withdraw it first?

That is a separate timing decision. See whether to withdraw redraw before refinancing. If the home may become an investment, the use of any new borrowing needs separate tax consideration; moving funds to offset does not by itself establish deductibility.

Sources and verification

• ANZ Plus: treatment of redraw when refinancing
• Borrower discussion: refinancing with available redraw

General information only. It is not personal financial, tax or legal advice. Finance approval, pricing and structure are subject to lender assessment and your circumstances.