Mortgage Redraw Savings Calculator
Estimate the interest saved and time cut from your loan when you redraw or leave extra funds sitting against your mortgage balance.
Your results
Calculation breakdown
- Effective balance
- Loan balance − redraw amount
- Interest saved
- Interest on full balance − interest on effective balance, same repayment
Worked example
Holding $20,000 in redraw against a $500,000 loan at 6% over 25 years can save around $38,000 in interest and cut roughly 14 months off the loan.
Assumptions
- Assumes the redrawn amount stays in the loan for the full remaining term.
- Does not include any redraw transaction fees your lender may charge.
How this calculator works
This calculator compares a mortgage with and without a lump sum sitting in a redraw facility, estimating the interest saved and the reduction in loan term from reducing the balance the interest is calculated on.
Frequently asked questions
Is redraw the same as an offset account?
They achieve a similar interest-reduction effect, but redraw funds have already been paid into the loan while offset funds sit in a separate transaction account; this calculator models the interest effect either way.
Does this account for redraw fees?
No, some lenders charge a fee per redraw; check your loan contract and factor any fees in separately.
What if I withdraw the redrawn amount later?
Withdrawing the funds removes the interest saving from that point forward; this calculator assumes the funds stay in the loan for the period modelled.
Results are estimates only and are not financial, tax, legal or credit advice.