In 2026, the offset vs redraw decision turns on a tax-liquidity trade-off. This 2,200-word independent analysis maps ATO deductibility, APRA deposit safety, and RBA rate paths to a dollar‑precise break‑even.
An offset account and a redraw facility both reduce your interest bill on paper — but tax treatment, refinance portability, and access mechanics separate them. A 2026 decision framework with numeric examples.
Offset is a transaction account; redraw is money you've already paid to the loan. Tax treatment, flexibility and rate impact all differ.
An offset account offsets the principal on which interest is calculated. The effect compounds daily - here's the math on a typical $700k loan.