Hello,
I want to check if anyone know which bank that offer home loan with redraw facility and has the following features.
The advance payment sits in redraw and can be withdraw anytime via online.
The repayment amount can be reduced to minimum repayment without having to use the amount in redraw account to pay off the principal.
To give some context when I was with the old uBank basic home loan.
The numbers are just an example.
Mortgage amount is $500k
Minimum repayment amount per month is $1000 for a loan term of 30 years
I put in $250k in redraw account
Daily interest calculated based on balance. $500k - $250k = $250k
These are the features I am seeking.
uBank automatically recalculated the minimum repayment to be $500 per month. I can reduce the initial repayment of $1000 to $500 on my own via online or app. I believe the minimum repayment is worked out based on the loan term of 30 years.
Of course, you can continue to repay $1000 per month which will obviously reduce the loan term.
If I am keeping up to my minimum repayment, the $250k sitting in redraw account is not used to pay off the principal. I can withdraw anytime via online or app, and the minimum repayment will be automatically adjusted upwards.
I knew the old uBank offer these features on redraw not sure about the current uBank.
I checked with few big banks. They don't offer such features. They don't reduce the repayment amount even if you are ahead of payment. It will just simply reduce the loan term. To reduce the repayment amount they will have to use the amount in redraw account to pay part of the principal.
Thank you
Interesting. Haven’t heard of anything like this before.