18 Jun Be smart with your mortgage – use an offset account and a redraw facility
Around 69% of all home loans in Australia have a redraw facility, while 40% have an offset account. Some have both. So who’s acting in their own best interests?
Before we answer that question and offend you, let’s put them under the microscope.
Both allow you to use any extra income or savings to reduce the balance of your loan, thereby reducing your interest repayments.
They also provide you with access to money which can be used to invest in property, shares or managed investments, for example. This is known as negative gearing and offers some very attractive tax breaks which we’ll have to leave aside for another article.The features that each offer, and how you use them, is what sets them apart:
So which is best?
As you can see, they are similar but each have their own special features. So that you have the best of both worlds we recommend you get both when negotiation a home loan.
Don’t forget to consider your budget, your income and your long term financial goals. Both offset and redraw accounts have their benefits, so think about what you want and then compare various home loans until you get the best deal.
Please arrange a convenient time to speak to Jesse Bruno, our mortgage broker at CentraMoney by clicking here.
