Nah an offset account is another Australian invention - our banking system is decades ahead of yours in terms of consumer product innovation.
It's essentially a savings account which "offsets" your mortgage and reduces your interest payable.
Right now I have a mortgage of $250,000, and savings in offset of $250,000. Therefore the balance of the mortgage which is charged interest is ($250 - $250) = $0. If I had $100k in offset, then I'd be charged interest of ($250 - $100) = $150k.
There are a number of advantages -
1) interest rates on mortgages are generally 2-3% higher than interest rates on savings accounts. Putting money in offset effectively means I earn interest at the mortgage rate, not the savings rate
2) interest earned on savings accounts is taxable at marginal rates (39% for me). Interest saved via mortgage offsets is simply less cash outflows/expenses and has not tax implication.
3) Money in offset accounts can be taken out at any time, without having to apply for a redraw or top-up to your loan.
4) Offset accounts are useful down the track if you need to structure loans for future property investments (whole other post required for that).