its really the only reason i ruled them out as an option my PPOR whenever i get it. dont know why they persist with not allowing for PPOR...though might enquire if i can get the repayment offset when i do find a place
i think it was stgeorge that used to reduce principal. edit: and yes they still do reduce principal for PPOR, as below is only investment
http://www.stgeorge.com.au/loans/home-loans/faqs/offset-facility.asp
