^ Thanks for your reply.

I am looking to buy a house as OO.

From what I understand (I could be wrong here), the way redraw feature works is that it allows you to redraw the extra amount of repayment you made every month (the amount above your minimum monthly repayment). These extra repayments are used to reduce the interest portion of your loan first. It will only reduce the principle portion once the interest portion have been fully paid up.

However, from what you mentioned above, it seems you're saying that whatever extra repayment will immediately be used to reduce the principle. Correct me if I'm wrong here.

So…….. could you let me know which exactly is the correct way of how a redraw feature works?

Also, in what circumstances is an offset account not as good as redraw for an OO loan? Thanks!

(Lets assume that there is no fee on the redraw & offset facility, no minimum withdraw / deposit, interest rate on the loan without offset is the same as interest rate on the loan with offset, same fee structure on both types of loan, and the offset offers a 100% offset.)