Mackay Born and Bred - đŸ“© (07) 4957 7424

💰 Offset vs Redraw: Which Feature Works Harder for You?

Ella Phillips

Administration Assistant

July 16, 2025

Mackay news
When you’re comparing home loans, you’ll likely come across two common features: offset accounts and redraw facilities. They both help you reduce interest and repay your loan faster—but they work in different ways.
At Gardian Finance, we’re here to help you understand the differences so you can make the most of your money in 2025 and beyond.

🏩 What Is an Offset Account?

An offset account is a transaction account linked to your home loan. The balance in this account is “offset” daily against your home loan balance when calculating interest.

📌 Example:

If your home loan balance is $400,000 and your offset account has $40,000 in it, you’ll only be charged interest on $360,000.
You can use this account like a regular savings or transaction account—deposit your salary, pay bills, or spend via card access—while saving interest in the background.

✅ Pros of Offset Accounts:

  • Reduce the interest you pay on your loan
  • Access funds any time via ATM or online banking
  • Great for those who want flexibility with their cash flow
  • Potential tax benefits for investors (seek advice)

🔁 What Is a Redraw Facility?

A redraw facility allows you to access extra repayments you’ve made on your home loan above the minimum required.

📌 Example:

Let’s say your minimum monthly repayment is $2,000, but you pay $2,500. That extra $500 goes into your loan’s redraw pool. You can withdraw it later if needed—depending on your lender’s rules.

✅ Pros of Redraw:

  • Also helps reduce interest (just like offset)
  • Encourages disciplined saving—less temptation to spend
  • No separate account to manage

🔍 Key Differences at a Glance:

Feature Offset Account Redraw Facility
Access Instant, like a bank account May take 1–2 days or require request
Flexibility High – full access at any time Lower – not ideal for daily use
Setup Separate account linked to loan Built into the loan itself
Discipline Less restrictive Helps avoid impulsive spending
Fees May have higher fees Often included in basic loans
Ideal for Active savers & investors Long-term savers or disciplined borrowers

🧠 Which One Is Right for You?

The best choice depends on your goals and financial habits.
  • Offset accounts are great if you want easy access to your money and actively manage your cash flow.
  • Redraw is better if you want to "set and forget" and reduce the temptation to dip into your savings.
At Gardian Finance, we’ll help you weigh up these features when choosing the right loan product—whether you're buying your first home, investing, or refinancing.

đŸ€ Need Help Choosing the Right Loan?

We’re here to make home loans easier to understand—and better suited to you. Whether you're after flexibility or financial discipline, Gardian Finance can guide you to the best option.
📞 Book a free home loan chat with our team today.
Let’s make your money work harder.
Post Tags :
Mackay newsFinanceMortgageLocal Mackay Tipsmackay loansGardian
Share this post :