ME Redraw

Discussion in 'Loans & Mortgage Brokers' started by Richard Taylor, 1st May, 2020.

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  1. Richard Taylor

    Richard Taylor Well-Known Member

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    I hear this morning that ME Bank have gone thru and cancelled the redraw access of their mortgage customers so if you thought you had it there for a rainy day it has certainly gone now.

    Goes to show the value of offset compared to redraw.
     
  2. Archaon

    Archaon Well-Known Member

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    I got my parents to set-up an offset for this reason.

    Any official word?
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

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    Another reason for Offset Vs Redraw (most brokers on here have been saying this for a long time)
    I suspect most people went with Ubank chasing rates, another reason NOT to focus solely on rates.
     
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  4. Trainee

    Trainee Well-Known Member

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    Firstmac?
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Chalk and Cheese

    FM is a Business, ME is a prestige charity, whom despite having unfettered access to all Industry Super Fund Members, is weeny in the sheme of things.

    FM is 10 years older, and has 50 % more under management by volume.

    Lets give ME right of reply, there will be more to this :)

    ta
    rolf
     
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  6. MTR

    MTR Material Girl Premium Member

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    I have a redraw facility with Resimac, now I wonder could this happen as a second tier lender????
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    It could happen with any lender.
     
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  8. MTR

    MTR Material Girl Premium Member

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    Credit crunch..... sign of the times
     
  9. Morgs

    Morgs Well-Known Member Business Member

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    Redraw is not a problem.. until it is!
     
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  10. MTR

    MTR Material Girl Premium Member

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    Just transferred my money from redraw to offset:)

    thanks for heads up
     
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  11. Propin

    Propin Well-Known Member

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    Thanks for the heads up! I just pulled some out.
     
  12. ff3

    ff3 Active Member

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  13. C-mac

    C-mac Well-Known Member

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    I have never bothered with a redraw facility for this and a couple of other reasons.

    Not when offset accounts are so so good and you have free reign of your money when/how you want it.
     
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  14. Cia

    Cia Well-Known Member

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    https://www.smh.com.au/business/ban...nts-linked-to-home-loans-20200501-p54oxn.html
    We used ME bank for our first property. So glad reading this forum made me realise that redraw isn't the same as offset accounts. Thanks @Rolf Latham was mainly your posts I remember alerted me to this. It's not a good time to have done this unilaterally but for the bank it's a risk mitigation strategy I suppose. Feel v sorry for the customers who probably were feeling safe at this COVID-19 time but their safety nets have been pulled out from under them.
     
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  15. Cia

    Cia Well-Known Member

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    Can this happen with your offset? Should we take the funds out of the bank and put them into savings in another bank account?
     
  16. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Yes they could apply any account you have with them against any debt you have. Much less likely though, unless you are defaulting.

    I would be more worried about the tax issues with redrawing from loans.
     
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  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Well there you have it :)

    Not just Buffoons running a pseudo business perhaps for the prestige, but as usual, actions such as this clearly demonstrate contempt for the members they are meant to represent :(

    Not the action per se, but not letting their borrowers know, especially in these already mental health challenged days ..................zero care and understanding.

    Was only a few years back where they opened the business to non members of Industry Funds

    Folks often tell me they would like an ethical bank..............ME is often on that list.

    ta
    rolf
     
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  18. Trainee

    Trainee Well-Known Member

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    But what was the point of it? Guaranteed to make customers hate you, but why did they do it?
     
  19. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    What a sensational and misleading article that is in the SMH.

    The author makes misleading claims such as:
    ...has blindsided its customers by removing cash from accounts linked to home loans during a global pandemic that has increased financial uncertainty.

    and

    removed funds from redraw facilities to pay down home loans

    and

    One customer, scientist Monica Genova, said on Monday the bank removed $24,000 from her redraw facility and transferred it to her home loan without notice

    The title of the article is
    The boutique bank raiding accounts linked to home loans

    Redraw is not a separate account. It is funds that can be redrawn from the loan because the loan has been paid down in advance.

    A bank cannot remove cash from the redraw facility and pay down a loan. All it can do is remove or reduce the ability to borrow extra funds by reducing the limit on the loan.

    The article also suggests that this hasn't happened across the board with all of their loan when they stated:
    "In a statement, it said the bank had identified that the redraw facility of some legacy home loans could lead to some customers falling behind their original repayment schedules. "

    https://www.smh.com.au/business/ban...nts-linked-to-home-loans-20200501-p54oxn.html
     
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  20. Cia

    Cia Well-Known Member

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