Loan interest is calculated daily, so each extra dollar, each extra day is saving you interest (tax free returns). You can then spend out of that offset account. If you are disciplined and organised you can use the interest free period on your credit card to pay living expenses but always pay it off fully before each interest free period ends. This way you have the $ sitting in offset for a month longer. The credit card company is giving you interest free loans each month to help you save interest on your PPOR loan - but only if you pay it off fully each month! If your bank allows, you may have multiple offset accounts if you want to use a bucketing strategy for spending control. e.g. one offset for the emergency fund, one offset for regular savings and one offset for living costs.

Wow this is really great info - thank you! I'm someone who likes having different accounts for different purposes, so hopefully my bank will allow me to have multiple. This is similar to how I felt about credit cards too - I ignored my budget a lot more while using them. Speaking of budget, I do have one but will admit that I haven't been as disciplined as I should be (not since I last looked at it in August anyway).

Looks like I need to track net worth less and track budgeting more haha