I have friends in Melbourne who treated a (paper) appreciation in the value of their home like it was a lotto win - borrowing money from their mortgage to finance a very expensive holiday and then later on buying a luxury 4WD. They were congratulating themselves on how clever they were at the time because they got these things at a much lower interest rate but the car is now worth a fraction of what they paid for it and the holiday a distant memory - meanwhile they'll be paying off those things for decades to come because it got lumped on their mortgage.

So, the only way people like that could come out on top would be to treat their house/investment property as a speculative asset and sell it for a massive capital gain that wiped out all their consolidated consumer debt. It seems many people probably did do that, but those days are fading into the past since the short term capital gains are cooling off. If you keep the house, you're paying all of it off, that's for sure, and the real cost of being in debt - the ongoing interest etc. - is almost always ignored.

They would have been better off with a short-term loan at a higher rate, they probably would have actually paid less in interest. I think there's actually a lot of ignorance out there about the real costs of mortgage re-draw; it's actually not a good idea unless you're using the money to improve the value of the property.

Redraw has now become the go-to method of managing faltering household finances. First they max it out on the credit card(s), then transfer it to the home loan via redraw - until they reach their redraw limit and are forced to make drastic cuts to household spending or liquidate their houses, hopefully getting enough capital gain to clear all the debt. Home loans are now bulging with what is really unsecured consumer debt. These are people whose mortgages were approved based on assumed capital growth in the houses they bought to begin with rather than the strengths of their own incomes. Everyone wants to borrow or cheat his way into wealth, or even just the image of wealth. How cute our flawed nature is.