Redraw Loan

Redraw loans offer flexibility where the bank allows you to redraw up to an LVR of 80%.

This means with a property you can take money out to use for other reasons such as a new car renovation or a holiday. When doing this your repayments will be adjusted accordingly.

The Lender may not however allow you to repay the redrawn amount in lump sums and may require you stick to a fixed amount so as to maximise interest earnings for them.

You must remember if you have a redraw facility on an investment property you will legally only be entitled to tax benefits up to the original loan amount even when the property value increases.

Don't make the mistake of claiming interest and expenses for any amount you borrow that is not directly related to that investment; the consequences of doing this will result in penalties imposed by the ATO.