When I type my numbers into this mortgage overpayment calculator: https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

and do a comparison between overpaying & saving the money, with an assumed saving rate of 5%...

which option is better also seems to depend on the amount of overpaying you are doing.

This calculator is a bit of a weird one. I and others have emailed them about it but not heard back.

You can test its assumptions by ticking 'compare to savings' and putting in the exact same interest rate as the mortgage. Mathematically, it should come out identical, but the calculator will come out tens of thousands in favour of overpaying.

The reason for this is that it compares the costs of the full mortgage term with no overpayments to the reduced costs if you overpay. But with the savings interest, it compares it to the shorter, overpaid mortgage. So basically, using the default values in the calculator:

* Default mortgage: £130k mortgage, 25 years long, at 3.5%. Total cost £185k

* Overpay by £200pm: mortgage now ends after 17 years, with a total cost of £162k = £23k cheaper

* Save £200pm at the exact same interest rate as the mortgage (3.5%): they calculate £200pm saved at 3.5% for 17 years = £15k earned in interest

THEREFORE, supposedly, the savings are less cost effective. But what's happened here is that they've made an unfair comparison between 17 years of interest paid and 25 years of interest (hypothetically) owed. In reality at year 17 your net situation looks the same for both options: either £0 mortgage and £0 savings if you overpaid, or £x mortgage owed and an equivalent £x saved if you saved.

It's a bit weird to get your head around. Making your own table in Excel showing the balances of the loan and savings year on year helps. Or just trust Manchester and others when they say the higher interest rate wins :)

Ultimately I think the calculator was built to make the case to an average person that overpaying their mortgage is worth the money and get them motivated about it. And it was built at a time where there was no chance you could get a savings account competitive with your mortgage anyway.