Offset or not. That is the question

milleniumaire

I'm looking to remortgage and considering the following two mortgages:
Borrowing £120,000
1.64% for 10 years (1.7% APRC)
or
1.84% for 10 years offset mortgage (2% APRC)

Both have the same terms and conditions (unlimited over payments etc) and fees of £999.

As I'm a freelance contractor working through my own limited company we withdraw £60,000 dividends per year, so could potentially put these into the offset savings account and throughout the year it would be reduced to 0. Currently, we have two Santander 123 accounts, so we are able to get 1.5% interest on 2 x £20,000.

I need to figure out whether to go the offset route or stick with the lower interest rate. Our current mortgage of 20 years is coming to an end and this was an offset mortgage, but since 2008 we haven't used the offset part as the interest rate was too low to be beneficial. In the early years, when the interest was 4% and 5% it was great.

I've used the MoneySavingExpert offset calculator to try to compare them, but this doesn't take into consideration the decreasing "Lump sum". I guess I could assume a lump sum of £30,000 i.e. the first 6 months it would be more than £30K, the second 6 months less. Is this realistic?

Is anyone aware of any calculators that would consider a reducing lump sum?