Redraw on Fixed Loan? Discover Your Options (2026)

Imagine this: you've locked in a great deal on your home loan with a fixed interest rate and feel a sense of financial security. But life happens — perhaps you receive an unexpected windfall or simply manage your finances well. Now, you're considering accessing those extra repayments. The question is, can you redraw on a fixed loan in 2026? The answer isn’t always straightforward, and understanding the nuances could save you both time and money.

Understanding Redraw on a Fixed Loan

Redrawing on a fixed loan involves accessing extra repayments that you’ve made towards your mortgage. The concept is straightforward with variable loans, but fixed loans can be a different ball game. Typically, when you fix your mortgage rate, you agree to set terms for a specified period, often two to five years. This means your interest rate remains unchanged regardless of market fluctuations, providing stability in your repayment amounts.

However, this stability can come with restrictions. Lenders often impose limits on the additional repayments you can make without incurring fees. Consequently, the option to redraw those extra funds may not always be available or may come with conditions attached.

Current Market Rates and Options

As of 2026, the Australian mortgage market is witnessing interest rates ranging from 6.49% to 12% for fixed loans, depending on the lender and the loan term. With over 83 lenders on the Esteb and Co panel, options abound for potential borrowers.

Lender	Fixed Rate	Redraw Facility
Lender A	6.49%	Available with conditions
Lender B	7.25%	Not available
Lender C	8.00%	Available

Eligibility criteria for accessing redraw facilities on fixed loans typically include maintaining a satisfactory repayment history and having made a minimum amount of extra repayments. It's crucial to check with your specific lender to understand their policies and potential fees.

How to Access Redraw on a Fixed Loan

If you're considering accessing redraw on your fixed loan, follow these steps to ensure a smooth process:

1. Check Your Loan Terms: Review your loan contract to understand if and when you can make additional repayments and access redraw facilities.
2. Contact Your Lender: Reach out to your lender to confirm the availability of redraw and any associated fees or conditions. Each lender's policies can vary significantly.
3. Calculate the Costs: Consider any fees associated with redrawing funds from your fixed loan. Some lenders may charge a fixed fee, while others might impose a percentage of the redraw amount.
4. Submit a Request: If redraw is available, submit a formal request through your lender’s online platform or by visiting a branch.
5. Review Your Finances: Ensure that accessing these funds aligns with your financial goals and doesn't compromise your ability to meet future repayments.

Tips and Considerations

Here are some expert tips to consider when thinking about redrawing on a fixed loan:

• Assess the Necessity: Consider whether accessing these extra funds is essential. Could it be more beneficial to let them reduce your overall interest payable?
• Consider Future Needs: If you anticipate needing large sums in the near future, it might be worth maintaining flexibility by not locking all extra funds into your mortgage.
• Factor in Fees: Understand that fees can quickly erode the benefits of accessing extra repayments, especially for small amounts.
• Consult a Broker: A mortgage broker, like Esteb and Co, can provide personalised advice and help navigate complex lender policies with access to a broad range of options.

Frequently Asked Questions

1. Can I always redraw on a fixed loan?
Not always. Redraw facilities on fixed loans vary by lender, and some may not offer this option at all.

2. Are there fees for redrawing on a fixed loan?
Yes, many lenders charge fees for accessing redraw facilities on fixed loans. It's vital to check with your lender for specific costs.

3. How do extra repayments affect my loan?
Extra repayments reduce your loan balance and the interest charged, potentially shortening the loan term.

4. What happens if I can't redraw on my fixed loan?
If redraw isn’t available, consider other financial strategies like personal loans or lines of credit for additional funds.

5. Does redraw affect my fixed interest rate?
No, accessing redraw does not affect your fixed interest rate but may impact your repayment schedule.

6. Is it better to have a variable loan for redraw purposes?
Variable loans typically offer more flexibility for redraws, but fixed loans provide rate stability. Your choice should align with your financial goals.

7. Can Esteb and Co help with fixed loan redraws?
Yes, with access to 83+ lenders, Esteb and Co can provide guidance tailored to your needs and help explore available options.