100% Offset is an optional feature that allows you to pay off your home loan sooner while keeping your savings separate.
For example, if Dan and Diane had a Variable Rate Home Loan of $100,000 and $10,000 in their "linked" deposit account; they would only be charged interest on $90,000 of their loan amount. Furthermore, by having their salary as well as their savings deposited directly into their "linked" deposit account they could save even more.
Dan and Diane's 100% Offset account may also be a tax effective arrangement because they do not earn any interest on the amount in their "linked" deposit account which would normally have been treated as income and subject to taxation at their normal marginal rate.
