Offset Accounts vs Redraw Facilities: What’s Best for You?
Choosing between an offset account and a redraw facility can affect how much interest you pay and how flexible your home loan feels. At Taz Mortgage Solutions, we help you make that choice wisely. Whether you’re a first-time buyer or an experienced investor, our team—known as the best mortgage broker Canberra relies on—is here to guide you.
As a trusted mortgage broker, mortgage agent, or lending broker, we make things simple. Our goal is to help you save interest, manage your loan better, and reach your financial goals sooner.
What’s the Difference?
Offset Account
An offset account is a bank account linked to your home loan. The money in this account “offsets” your loan balance, meaning you only pay interest on the difference.
Example: If your loan is $400,000 and you keep $50,000 in your offset account, you’ll only pay interest on $350,000.
Redraw Facility
A redraw facility allows you to make extra repayments on your home loan, then “redraw” or take that money back out later if you need it.
It’s like building a savings buffer inside your loan account.
Offset vs Redraw: Key Differences
| Feature | Offset Account | Redraw Facility |
|---|---|---|
| Access | Works like a regular transaction account | Accessed via your lender’s banking system |
| Interest Savings | Calculated daily on your offset balance | Based on the total extra repayments made |
| Flexibility | High – easy to deposit or withdraw anytime | Moderate – some restrictions or approval delays |
| Fees | May include monthly or account-keeping fees | Usually lower or no fees |
| Tax Treatment | No tax on the interest you save | No tax on the amount you redraw |
Who Benefits Most from Each?
Use an Offset Account If:
– You want easy access to your funds
– You receive a regular income or large savings
– You prefer using one account for bills, savings, and your loan
Offset accounts work best for high earners and active account users. Your mortgage specialists at Taz can help you find one with the lowest fees.
Use a Redraw Facility If:
– You’re a disciplined saver
– You want to pay off your loan faster
– You rarely need to access extra money
Redraws are great for long-term planners. Your mortgage agent can help you set up the loan so extra repayments stay available when needed—without daily temptations to spend.
Can You Use Both?
Yes! Some home loans offer both an offset account and a redraw facility. This gives you the best of both worlds—access and discipline. Your mortgage loan broker can help you build a strategy using both features to save more and stay flexible.
Our Process at Taz Mortgage Solutions
When you speak to a mortgage and finance broker from our team, we take the time to understand:
– Your cash flow: How often you save or spend
– Your goals: Pay off debt faster, invest, or stay flexible
– Your lifestyle: Self-employed? Young family? Retiree?
– Your loan type: Fixed, variable, split, or interest-only
We also model how much interest you’ll save under both scenarios. As experienced lending brokers, we compare options across top banks, credit unions, and non-bank lenders.
Real-Life Example
Sarah, a teacher from Canberra, was using a redraw facility. She made extra repayments but found it tricky to keep track. After speaking with a mortgage finance broker at Taz, she switched to a loan with an offset account. Her salary now goes straight into the offset. She can use it any time—and she’s saving interest every single day.
Final Thoughts: Which One Should You Choose?
Use offset if you need flexibility, make regular deposits, or want fast access to your money.
Choose redraw if you’re disciplined, focused on saving, and don’t need to touch extra funds often.
Or use both, with help from a mortgage loan broker who can design a custom solution.
Why Choose Taz Mortgage Solutions?
We’re more than just a mortgage broker—we’re your partner in smarter borrowing. As your mortgage agent, mortgage lender broker, and lending broker, we’ll explain your options in simple terms and show you where you’ll save most.
Hundreds of clients trust us as the best mortgage broker Canberra homeowners rely on. From first homes to investment loans, we make lending easier, clearer, and more effective.
Ready to Take the Next Step?
Speak with a qualified mortgage and finance broker at Taz Mortgage Solutions today. We’ll compare your options, run the numbers, and help you choose the smartest path forward.
📞 Contact us today and see how much smarter your loan can be—with the right strategy behind it.
you can also review our guide:- Home Loan Products Explained: Finding the Right Mortgage for Your Situation