Offset accounts and redraw facilities are comparable in certain ways and are frequently combined, but there are a few major differences. Redraw options are often only available on variable rate house loans; with a redraw facility, you can make additional repayments to your home loan and redraw them if necessary. For example, instead of taking out a new loan, you could withdraw $50,000 from your home loan to pay for a major repair.
A redraw facility’s flexibility varies depending on the lender. Some lenders will allow you to redraw money immediately online, while others will require you to fill out an application. You may also be charged a price for each withdrawal, although some home loans allow you to make “unlimited fee-free redraws” at any time.