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Offset vs Investment - Which is better?

5Mo ago 3 Replies 109 Views
Hey everyone, 

I have read on here a few times that keeping your money in an offset account is better than keeping in a redraw for tax purposes (investment), can some explain how far is this right. Any personal experiences to share?

Thanks 
R
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Peter Crompton Peter Crompton
9D ago
Depends on your financial situations and your goals. From an interest accrual there is not much difference whether your money is in Offset or Redraw. You would still be able to claim tax benefits (on interest paid on the loan where applicable). 

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Liam Liam
5Mo ago
If you redraw for personal use that part of the loan is no longer tax deductible however if it’s in a offset facility it never actually touches the loan so the extra interest you incur is still tax deductible no matter the use of the funds.
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InvestAus InvestAus
5Mo ago
 From a tax perspective it's identical. From a lending perspective, funds in redraw are considered additional repayments - ie, it's the banks money. If it's in an offset it's your money.
Another issue can arise if you want to refinance and retain your funds in redraw. The new lender may not have policies that support what they perceive to be an equity release.
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