ING Direct is reducing the variable interest rate on its 100 per cent offset home loan product, Orange Advantage, by 0.10 per cent p.a. from today 30 May 2011 amid toughening competition among Australian lenders.

The interest rate for Orange Advantage customers with total ING Direct residential borrowings of between $300,000 and below $500,000 will reduce to 6.99 per cent, and for customers with $500,000 or more it will reduce to 6.89 per cent p.a.

A key feature of the Orange Advantage home loan is the additional benefit of 100 per cent offset via the Orange Everyday transaction account.

“We’re keen to encourage more brokers to promote Orange Advantage as a great option for customers looking for a solution which involves more than just a basic home loan” said ING DIRECT’s Head of Broker Distribution, Mark Woolnough.

“To date, broker and customer feedback has been extremely positive and we see this decision as an opportunity to capitalise on the proposition. So much so that we have some product enhancements in the pipeline which will bolster the offering further”, Woolnough added.

On Monday last week, National Australia Bank Ltd has taken the pricing war to new heights by selling discounted mortgages online. The bank’s offer, which will last until the end of this, month saw all standard variable rate mortgages sold online priced at 6.59 per cent.

St.George Bank followed shortly as it slashed its two-year, fixed packaged home loan to 6.99 per cent per annum. The Westpac-owned bank increased its Advantage Package discount from the normal 0.15 to 0.25 per cent p.a. The offer applies for new St.George two-year Fixed Rate Advantage Package loans of $150,000 or more, for applications from May 25 until 20 June 2011 and is available for new and existing customers.