How an Offset account helps you pay less interest on your home loan.

An offset account is a deposit account that is linked to your home loan, which allows you to "offset" any savings you have against your mortgage interest. You will not earn interest on your savings in your offset account.

There are two main types of offset account:

  • 100% offset account- offsets your mortgage by the entire balance of your offset account.
  • Partial offset account – which only offsets your mortgage by a portion of the balance. A 50% offset account only offsets your mortgage principal by 50% of your offset account balance (Defence Bank does not offer partial offset accounts).

The higher the percentage of your offset account, the more you will save on interest.

At Defence Bank, our 100% Offset Account works by using 100% of the balance to ‘offset’ or effectively reduce the portion of your home loan accruing interest - which ultimately allows you to pay more into your loan principal.


At Defence Bank, offset accounts can only be linked to a variable rate home loan. Unlike some lenders we don’t charge a different or higher interest rate on your home loan if it has an offset account.

They also come with a camo Visa debit card, EFTPOS and mobile app and online banking so you can access and use your funds as you would with any regular transaction account.

Some ways in which you can maximise your offset benefit:

  • Get your salary paid directly into your 100% offset account and make every dollar count.
  • You only benefit if you have surplus savings in the account. The more you have in your offset account daily, the less interest you’ll be charged.
  • If you are disciplined about paying off your credit card debt in full before the interest-free period runs out, you may consider using a credit card with up to 55 days interest free period like our Defence Bank Foundation Credit Card. The interest-free period allows you to keep as much of your pay and any other savings or earnings, for as long as possible to maximise your offset balances.

To set up an offset account, you’ll need to speak to your home loan consultant. Or contact your nearest branch or our Contact Centre on 1800 033 139.

Find out more about our Offset Account.

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