Offset account vs redraw: which feature suits you?

An offset account is a transaction account linked to your home loan. The balance offsets your loan principal for interest calculation purposes — so $50,000 in an offset account on a $500,000 loan means you pay interest on $450,000.

Redraw allows you to access extra repayments you have made above your minimum requirement. It is useful if you have been making additional payments and need to access those funds later.

Offset accounts offer more flexibility for day-to-day money management. Redraw is simpler but may have restrictions or fees depending on the lender.

The right choice depends on how you manage your cashflow. A broker can model both scenarios against your specific situation.