Offset account
An offset account is a separate account linked to your home loan. The money in it is set against your loan balance, so interest is charged on the difference. The money stays yours, and you use the account as normal.
Redraw
Redraw lets you take back money you have paid into the loan above your required repayments. It is part of the loan, not a separate account, and lenders can set limits or conditions on how you access it.
The main difference
With an offset, your money sits in an account beside the loan. With redraw, your extra repayments sit inside the loan, and you ask the lender to release them.
What to check
- Whether the loan that includes the feature has a higher rate or an annual fee.
- Any limits or conditions on withdrawals or redraws.
- Whether the feature is offered on the rate type you want. Offset accounts are more common on variable rate loans.
The right feature depends on how you manage your money. We can compare loans across our panel and set out the costs next to the features. Contact Us. No obligation.