Offset vs. Redraw: Maximising Your Mortgage Strategy

Understanding the difference between offset accounts and redraw facilities can significantly impact your mortgage strategy. Here’s how:

 Offset Accounts: An offset account is a separate savings or transaction account linked to your mortgage. The balance in this account is deducted from your outstanding loan principal before interest is calculated. This can potentially help you save money in interest over the life of your loan while maintaining easy access to your savings.

Benefits of Offset Accounts:

o   Interest Savings: Reduce the amount of interest you pay by keeping your savings in an offset account.

o   Flexibility: Access your funds whenever you need them without affecting your mortgage repayments.

Redraw Facilities: A redraw facility allows you to withdraw any additional repayments you've made on your mortgage. It provides flexibility by enabling you to access extra funds you've paid towards your loan, which can be beneficial for unexpected expenses or investments.

Benefits of Redraw Facilities:

o   Flexibility in Access: Access additional payments made to your mortgage when needed, providing financial flexibility.

o   Interest Savings: Similar to offset accounts, reducing your loan balance through extra repayments can save on interest over time.

o   Ease of Use: Redraw facilities are typically straightforward to use, often available through online banking platforms.

Choosing the Right Option: The choice between offset accounts and redraw facilities depends on your financial circumstances. Consider factors such as interest savings, liquidity needs, and tax implications to determine the most suitable strategy for you.

Ready to optimise your mortgage strategy? Let’s discuss how offset accounts or redraw facilities can align with your financial goals. Reach out to explore your options today!