Question about offset mortgages: offset or overpay

mogwai10

Hello everyone, I am a longtime lurker here and thought that this thread might be the best place to ask my question as a lot of people here seem to make use of offset mortgages. I have read and enjoyed Tilly's MGW in 6 yrs thread and it's given me a lot of ideas and inspiration. I also spend a lot if time reading the NBI thread and MMandM thread, both of which support me in my move away from wanting 'stuff' and being more mindful of my spending.

Anyway, I have an offset and have fixed my monthly repayments so that we automatically overpay each month as my aim is to reduce the term. I have done a lot of searches on this question but can't quite seem to confirm or disprove that the benefit of offsetting an amount say £100 is the same as overpaying by £100. My feeling is that overpaying provides more benefit due to effects of compound interest but my preference is to offset as I like to know I can access the money if I want it.

This was confirmed when I was playing about the the Natwest offset calculator (only one I can find that allows you to compare offsetting and overpaying- please tell me if others) and according to it

on some made up figures:
if you offset £400 a month on a £200,000 mortgage over 15 years you would

Pay off your mortgage
1 year, 1 month early

Saving £19,429


but if you over paid on same mortgage by £400 you would
pay your mortgage off 4 years early

saving £19,429

so my question is, is this calculator right and for those of us wanting to reduce our term is overpaying better than offsetting (if possible)?

Sorry if this is blindingly obvious!:beer: