Understanding how Redraw Facility and Offset Account benefit you
Understanding Redraw Facility and Offset Account: How They Benefit You
When it comes to managing your home loan, understanding features like redraw facilities and offset accounts can help you save money and pay off your loan faster. In this article, we'll explore what these features are and how they can benefit you.
Redraw Facility: What Is It?
A redraw facility is a feature offered by some home loans that allows you to access any extra repayments you've made on your loan. If you've been making additional payments on top of your regular mortgage repayments, a redraw facility lets you withdraw these extra funds if you need them. This can be useful for unexpected expenses or emergencies.
How Does a Redraw Facility Benefit You?
Flexibility: A redraw facility gives you the flexibility to access your extra funds when you need them, without having to apply for a separate loan.
Interest Savings: By making extra repayments into your home loan, you can reduce the amount of interest you pay over the life of the loan. Accessing these extra funds through a redraw facility can help you save even more on interest.
Pay off Your Loan Faster: Using a redraw facility to make additional repayments can help you pay off your loan sooner, potentially saving you thousands of dollars in interest.
Offset Account: What Is It?
An offset account is a transaction account that is linked to your home loan. Instead of earning interest on the balance of the offset account, the balance is offset against the balance of your home loan when calculating interest. This means you only pay interest on the difference between the two balances.
How Does an Offset Account Benefit You?
Interest Savings: By reducing the balance of your home loan that interest is calculated on, an offset account can help you save on interest payments.
Tax Benefits: In some cases, the interest saved through an offset account may be tax-deductible, particularly if you use the account for an investment property.
Flexibility: Like a redraw facility, an offset account provides you with flexibility and easy access to your funds, as you can use the account for your day-to-day transactions.
Why Choose Melcity Finance Broker?
When it comes to finding the right home loan with features like redraw facilities and offset accounts, Melcity Finance Broker can help you navigate the options available and find the best deal for your needs. Our experienced brokers will guide you through the process, ensuring you understand your loan features and how they can benefit you. Contact us today to learn more about how Melcity Finance Broker can help you manage your home loan more effectively.
