Redraw facility

How can redraw help me?

Redraw can reduce the interest you pay on your home loan. When the loan interest is calculated, the money you have in redraw reduces the overall balance of the loan that the interest is calculated on. For example, if your home loan balance (without redraw) is $500,000 but you have $50,000 in redraw, the interest you are charged will be based on an outstanding balance of $450,000 rather than $500,000.

So, what's the difference between an offset account and redraw?

Both can help you save on interest, but they work differently:

• Offset account: A separate transaction account that reduces the balance your loan interest is calculated on.

•  Redraw facility: Stores any additional repayments you have made directly on your loan, reducing the outstanding balance of your loan.