Commbank -- changes to redraw from Feb 16th !?!?!

I think you're speaking for all of us when you say that!

Thanks for all the info you're providing on this thread.

 

Hi All

I too have received ‘the email ‘ and am still perplexed.

Can I ask how it will work In this scenario.
Still trying to work out how the redraw reduces since nirmally the repayment amount (principal and interest) gets deducted from an everyday savings account.

Current loan balance: $310K
Current redraw:$40k
Total balance: $350k(if took out my redraw)
Repayments : $2000/month P/I
Debit account: normal everyday account

Are we now saying that the debit repayment P/I amount ($2000) will be now be deducted from my redraw and NOT my normal everyday account.
And then once all the redraw amount is used up, they’ll start to debit the normal everyday account again.

Or is it that some of the repayment will be taken from the everyday account and some from the redraw?

Apologies if I’ve misunderstood earlier replies.

 

Looking at my own loan again, I had forgotten we had transferred our offset to the redraw, to reduce the minimum repayment required. And that the redraw balance is just the "extra" payments, not the difference between original loan and current balance. So I am clearer there.

I don't think the repayment account/method changes.
I *think* your redraw will be limited to a maximum of $38K (ie current redraw less monthly repayment) but also by the remaining duration of your loan - so if you have one year left of the original loan term you probably can't draw out that $38K anyway.

CBA example:
"Kya takes out a $500,000 variable rate home loan with a 30 year loan term and makes an additional repayment of $5000 in year 2. If Kya continues to pay the minimum amount going forward, in year 10 her redraw balance will be $4220"

I can see *why* they've done this change (responsible lending) but it seems to have a huge impact if you have a significant redraw balance that you were planning to use in the future.

 

Agreed qak.

Thanks for clarifying and will be adjusting out my redraw.

Cheers

 

Just be aware that doing this can cause issues with future deductibility so you might want to split the loan to reflect the redrawn amount.

 

Thanks @Jess Peletier - hadn't thought that far ahead!

Is CBA easy to split loans with? It is a MAV package.

I'm not sure how the split would work. Setup is effectively (different numbers):
Original loan amount ($500K)
Redraw $495K
Current loan balance ($5K)
Offset account $5K
ie we are not paying any interest at present.

I'm not sure if redraw into the offset will retain the existing 100% investment purpose ...

We really don't know what the funds might be used for (ie we have nothing planned or even on the horizon).

Edit - P&I

 

Ah right - confirm with your accountant, but to my unlicensed eyes there's not much point splitting that, you'll have a $5k investment loan remaining

It's very easy to split though, it's just a form.

 

Thinking about how this affects my setup, as I have several investments funded from p&i svrs.

If I sell an investment, and reimburse the svr the original amount $x borrowed (without closing the svr) then the amount I can redraw for the next investment is $x minus $y (my monthly repayment) thus effectively losing $y investment funds for each investment swap.

Is this correct? (despite my svr being auto debited each month from a separate account)

 

This could possibly be true, yes. From what I understand, this would be the case. But it should only be that amount, once, not every time you repay and redraw. It's like your limit would reduce slightly, by one payments worth.