Orange Advantage home loan and the offset
Orange Advantage is our variable rate home loan with a 100% interest offset facility when linked to an Orange Everyday account. When you open an Orange Advantage home loan, it comes with an Orange Everyday offset account.
What is an offset account and how does it work?
An offset account is a transaction account linked to your home loan. Its balance is used to literally offset the amount owed on your home loan, which in turn reduces the amount of interest payable.
It works like a regular Orange Everyday account – the key difference is, it’s linked to your Orange Advantage home loan and helps reduce the interest charged on your home loan. The money you have in your Orange Everyday is ‘offset’ against your home loan balance. That means you’re only charged interest on the difference between your total loan balance and the amount in your offset for any given day (this is where you save).
Every dollar in your offset account works to reduce the interest you pay. When used to its full potential, an offset account may help you pay off your home loan sooner.
Here’s an example
a) Let’s say you have a home loan with an owing balance of $370,000, at an interest rate of 4.5% p.a.
b) You also have $10,000 of savings in your Orange Everyday account linked for offset
c) You’d only pay interest on $360,000 of your loan.
This means, assuming the interest rate remained the same and you kept the $10,000 in your offset account for the life of your loan, you could save up to $27,183.16 in interest and pay off your loan 14.9 months sooner.
How to deposit into your Orange Everyday
You can do this by having your salary deposited into your account, transferring money from another eligible ING account (if linked to your Orange Everyday) or by a ‘Pay Anyone’ transfer from your current bank. Simply use the BSB number 923100 and your Orange Everyday account number.
For information on account types that can be linked as offset, refer to “What account can be linked for offset purposes?”