Redraw versus Re-Finance

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woodsman
Member
@woodsman
Join Date: 2004
Post Count: 714
March 2, 2004 - 11:10 pm
Whilst aware of some of the differences, I thought some of the experts could confirm all differences and other implications of pursuing redraw versus refinancing. Thanks
James
Mortgage Hunter
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@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 2, 2004 - 11:29 pm
James can you be a little more specific.
These are two completely different things.
Redraw is withdrawing money accumulated in the home loan whereas refinancing is renegotiating the entire loan – presumably for more funds in your case.
What is your aim?
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
woodsman
Member
@woodsman
Join Date: 2004
Post Count: 714
March 3, 2004 - 4:48 am
MH,
It wasn’t for a specific case, but I have seen commentary from some people that redraws in some circumstances are better than refinancing.
Understand the basic difference and that re-financing allows you to use capital growth in your property. But I was wondering if there were any other costs (aside the stamp duty, loan costs etc) or other implcations for the future that should be taken into account.(Maybe I am looking for something that is not there!!)
For myself, I would always seek to unlock increase in capital growth, so re-financing I would imagine be applicable to me.
James
Rubbachook
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@rubbachook
Join Date: 2003
Post Count: 288
March 3, 2004 - 5:25 am
Redraw = you have the money already and it’s surplus on your loan
Re-finance = changing the size or terms etc of your loan
MortgageHunter is right in asking your aim. These are not usually interchangeable tactics.
FYI
Member
@fyi
Join Date: 2004
Post Count: 27
March 4, 2004 - 3:41 am
James,
Normally, a redraw will only attract a fee for processing. As you can only draw out the amount you are ahead on your loan (which will roughly equate to any extra payments above the minimum you have made + interest doing this has saved) no mortgage stamp duty is payable as you have already paid it.
Some loans (usually those within packages) are exempt from redraw fees altogether – but you will find whether this applies to you or not in your credit contract.[]
You also don’t have to fill out an application form for a redraw – and it is much quicker….
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