Choosing the right mortgage is not just about the interest rate. The features built into your home loan can have a major impact on your cash flow, flexibility, and long-term savings. Making choices about Offset accounts, redraw facilities, repayment options, and fixed versus variable interest rates are some of the most important decisions borrowers face.
Whether you are a first home buyer, upgrader, or seasoned investor, understanding these features helps you choose a mortgage that aligns with your goals, not just one that looks attractive on paper.
“The biggest mistake we see is people chasing the lowest rate without understanding the features they are giving up. A well-structured mortgage should be flexible enough to grow with you. That is what separates good outcomes from great ones.”
Ben Hawley, Co-Founder, Azura Financial
What is an Offset Account?
An offset account is a transaction account linked to your mortgage. The balance in the offset account is used to reduce the interest charged on your loan.
Your monthly repayments stay the same, but the funds in the offset account, offset the interest you pay, meaning you pay down more of the principal.
If your loan is $1,000,000 and your offset account has $100,000, you will only pay interest on $900,000.
Offset accounts are ideal for borrowers who keep surplus funds in savings or business accounts. They help reduce the amount of interest paid and can shorten the life of the loan without locking funds away.
Azura Financial structures many high-value loans with multiple offset accounts, allowing clients to allocate funds for different purposes, such as tax, renovations, or property purchases, while maximising interest savings.
What is a Redraw Facility?
A redraw facility allows you to make extra repayments on your home loan and then withdraw those funds later if needed.
For example, if your loan is $800,000 and you have paid an extra $30,000 in voluntary repayments, you can redraw those funds for renovations, investing, or emergencies.
Unlike offset accounts, redraw access can sometimes take longer and may be restricted depending on the lender. Not al loans, including most fixed rate loans, allow redraw facilities.
Fixed vs Variable Rate Loans
Fixed rate loans offer a guaranteed interest rate for a set period, usually between one and five years. Your repayments stay the same regardless of market movements.
Variable rate loans fluctuate with the market, usually following changes to the Reserve Bank of Australia’s cash rate. This means repayments may go up or down.
At Azura Financial, we always structure accounts to best suit their needs. In some instances, the most applicable strategy can be to combine both fixed and variable portions.This in some instances can give clients certainty on one side, and flexibility or offset access on the other.
Interest-Only vs Principal and Interest
With interest-only loans, your repayments cover just the interest for a set period, usually one to five years. This keeps repayments lower, which can help investors improve cash flow.
Principal and interest loans involve paying down both the interest and the loan balance. This builds equity faster but has higher monthly repayments.
Interest-only loans can be useful in investment strategies, especially when paired with offset accounts. However, they need to be managed carefully, as repayments increase once the interest-only term ends.
Extra Repayments and Repayment Flexibility
Some lenders allow unlimited extra repayments on variable loans. Others cap them on fixed loans, often at $10,000 per year.
Repayment frequency options; weekly, fortnightly, or monthly. It can also help reduce interest over time, depending on how they align with your income cycle.
Brokers help you identify which lenders offer these flexibilities and how they affect the total loan cost.
Loan Portability
Loan portability allows you to transfer your existing mortgage to a new property without needing to refinance. This can save time and costs when upgrading or downsizing.
It is not available on all loan types and may involve settlement conditions. Azura Financial brokers assess whether portability is beneficial compared to a full refinance.
Why Your Broker Matters
Understanding which mortgage features suit your goals is not something a rate comparison website can determine.
At Azura Financial, our brokers:
- Compare over 60 lenders for product flexibility, not just price
- Match product features to your life stage, income structure, and investment strategy
- Structure multiple offsets, redraws, splits, or interest-only loans when it adds value
- Explain break costs, portability, and feature limitations that may not be clear upfront
Whether you are a first-home buyer, self-employed, investing through a trust, or planning to expand your property portfolio, the right features can protect your cash flow and reduce risk.
Frequently Asked Questions
Is an offset account better than a redraw facility?
Offset accounts offer more flexibility and faster access to funds. They also allow you to separate savings from the loan. Redraws are useful for long-term surplus payments but can have access limits.
Can I make extra repayments on a fixed-rate loan?
Some lenders allow extra repayments on fixed loans, usually up to a set amount per year. Check the conditions, or ask your broker to find a product that allows more flexibility.
What happens when a fixed rate ends?
Your loan usually reverts to the lender’s standard variable rate, which . This can often be significantly higher. Azura Financial contacts clients before their fixed rates expire to help them review options and avoid rate shocks.
Can I have both offset and redraw on the same loan?
Yes, some variable loans offer both. A broker can identify lenders that combine these features in a single product.
Are these features available for investment loans too?
Absolutely. Investors often use offset and interest-only features to manage tax and cash flow. Not all lenders offer the same flexibility for investment loans, so structure matters.
Can I transfer my home loan when I buy a new property?
Potentially. If your loan has portability, and your new property meets the lender’s criteria, you may be able to transfer the loan. Your A broker will assess the best outcome for your situation. if it is more cost-effective to refinance instead.
Get Expert Advice on Your Home Loan Features
The right features can save you thousands, reduce stress, and give you control over your finances. The wrong ones can cost you flexibility, cash flow, or borrowing power down the line.
Speak to an Azura Financial broker today and get a loan structure that works for your life, not just your interest rate.
