This is what "I just woke up brain looks like" = collared = fixed. We just use different terminology.

The way I interpreted it made it sound like it was a mechanism to prevent the rate of the loan exceeding a certain value, but not staying at a constant value throughout the period. My misunderstanding is corrected.

Our loan was fixed for the first 3 years, while we built a pool of savings. After that three years, we got an "offset" which basically ... uh, "offsets" you remaining balance against your savings.

So, owe 100k, have 30k in savings, pay interest on the 70k difference only. This is often "offset" by a higher interest rate, and additional fees, so you never win, unless you have a substantial offset balance. You can further use the bank's own products against them, by employing credit cards. Put all your expenses on credit cards, keep your savings in the "offset", then pay the credit card off a day before any charges start gaining interest there.

Labour intensive, but a small victory.