Offset or Redraw: what’s the difference?

The two seem similar in the sense that they both help you to pay off your mortgage sooner, but, they operate in different ways, if you choose the wrong way you could have big problems come tax time.

Here's a breakdown:

Offset: A transaction account which is linked to your home loan. The benefit is that the money in your account is offset daily against your loan balance, meaning you only pay interest on the difference.

Redraw: A feature which enables borrowers to access additional funds they have paid into their mortgage. The balance of this facility consists of whatever extra payments the borrower has made into loan above the minimum repayments.

Which one is right for you? Contact us to learn more about setting yourself up for the future