EZY LOAN MERCHANT

A redraw facility allows you to deposit extra money (above your regular repayments) directly into your home loan account. You can then redraw those extra funds if and when
you want to. In respect to saving interest, a redraw facility has a very similar effect to a 100 % offset account.
If you consider the example used earlier, it means that with a redraw you would be
paying 4 % interest on $ 170,000 instead of on $ 200,000 (because of $ 30,000 in redraw)

OFFSET vs REDRAW

So if redraw facilities and 100 % offset accounts have very similar savings, which one is best for your needs?

As offset accounts operate in a similar fashion to a savings account your funds are usually easily accessible. Some offsets even come with credit cards, EFTPOS and cheques for ease of use. Depending on the Lender it may not be as easy to access your funds with a redraw
account as some lenders will limit the redraws you can have per year, may have a minimum redraw amount and may charge you a redraw fee. However some people may prefer a redraw facility as the excess funds are not necessarily as easy to access.

What is important is to find out exactly how a Lender’s offset account or redraw facility
operates before you choose a Lender or one of these facilities because they are definitely
not all the same.

Talk to your trusted professional and make sure you have all the facts before making a
decision!