We often hear the terms ‘offset account’ and ‘redraw’ bandied about, but what do they actually mean and how can they help you pay off you loan faster? How an offset account works. An offset account works like a high-interest savings account linked to your loan. The funds sitting in an offset account are saving you interest on a daily basis. For example, if you have a $600,000 home loan and an offset account with a $50,000 balance, you will only be charged interest on $550,000