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Finance Basics4 min read
Offset Accounts and Redraw Facilities: What's the Difference?
Offset and redraw features are often discussed together, but they work differently. Understanding the distinction can support a more informed loan structure conversation.
How an offset account generally works
An offset account is usually a transaction account linked to a home loan. Its balance may be considered when interest is calculated, depending on the loan terms.
How redraw generally works
Redraw may allow access to extra repayments made above the minimum repayment, subject to lender conditions and product rules.
Access and control can differ
Offset accounts and redraw facilities may differ in how easily funds can be accessed and how they are treated by a lender.
Check suitability before relying on either feature
Loan features should be considered against your goals, spending habits and lender conditions before choosing a product.
General information only. This guide is provided for general information and does not take into account your objectives, financial situation or needs. Lending is subject to eligibility, lender criteria and approval. Speak with a broker for guidance based on your circumstances.