The 100% offset is a savings linked to your homeloan account. Unlike a Line of Credit which is an all in one account like a credit card, the offset account is a seperate account. For every dollar that is in your 100% offset savings account is offset by that amount on your mortgage. In actual fact the offset account is set at the same interest rate as your mortgage account.

Banks work offset accounts in many different ways. When looking for offset accounts look for:

Account is fully 100% offset. Some banks offer them as partial offset.
Minimum account balance before offset begins working.
Extra fees for offset account.
Over time by keeping additional funds in your offset account, and making the required payments, you may pay less interest on your loan and more off your principal.
Mortgage Offset accounts and Line of Credit Facilities can attract higher fees and / or have limitations on how the offset account operates.