CLIC MONEY / LEARNING CENTRE
Offset and redraw: different tools.
Understand where the money sits, what access depends on and the questions to discuss before changing a loan.
Where is the money?
An offset is a linked account that can reduce the balance used to calculate interest, subject to the product terms. Redraw concerns access to eligible extra repayments paid into the loan.
Check access and cost.
Fees, eligibility, access restrictions and lender terms differ. Compare the cost of the feature against the likely benefit for the balance you expect to hold.
Ask about future use.
The use of borrowed money can have tax implications. Ask your accountant about your circumstances before changing how funds are used.
For official consumer guidance, visit ASIC Moneysmart: using a mortgage broker ↗.