Hugh recently chatted with Matt Johnson of The New Daily to weigh in on the redraw v offset account saga.
Centaur Financial Services managing director and financial adviser Hugh Robertson said the saga highlighted the low levels of financial literacy around both options.
“If you talk to the majority of people, they would assume they are one and the same,” Mr Robertson told The New Daily.
Although redraw facilities enable home owners to use extra repayments in times of strife, there’s plenty of risk because it’s attached to a mortgage, Mr Robertson said.
“Anyone with debt should try to utilise an offset account if they can and [use it to] pay all of their living [expenses],” Mr Robertson said.
“Offset accounts are the utopia for bank accounts in Australia.”
Mr Robertson said prospective property investors would benefit more from offset accounts, as they reduce a loan’s interest and would allow them to use the extra cash as the deposit for their next home.