Offset vs Repayment (Unencumbered) Mortgage

RocknRoll54

Hi
We have recently finally become mortgage-free. Our son will be going to study Medicine abroad and we will be needing approx £100,000 over the next 5 years for fees etc. I'm trying to work out whether it will work out cheaper to take out a offset mortgage with First Direct (currently 3.29%) or a repayment mortgage with FD at 1.99%. We have minimal savings at the moment.
The strategy would be like this:
a) taking £20k out of the £100k ANNUALLY over the next 5 years to cover fees etc.
b) making frequent (fee-free) overpayments (approx £1k/month).
The mortgage will be over a 25 year term but we hope to pay it off with the above strategy in less than 10 years (between 8-10 years we should imagine).
Would it be cheaper to have an offset than a repayment in these 8-10 years?
Thanks in advance

getmore4less

What LTV are you trying to borrow at?

if a decent LTV there should be better rates than those

Not clear if you have though this through 

but if we go with you are planning to borrow £100k over 25 years at around 2%

if the £20k are needed at the beginning of each year then that is 4year initial plan
up front to  end of y4 forthe final £20k.

amount	rate	payment	owing
£100,000.00	2.00%	£423.85	£87,158.89

can overpay by £1kpm  (paid off in 6y 3months)

amount	rate	payment	owing
£100,000.00	2.00%	£1,423.85	£37,230.15

or a slightly less aggressive £1kpm payment in total.  paid off in 9 years 1 months

amount	rate	payment	owing
£100,000.00	2.00%	£1,000.00	£58,392.53

but lest say you can pay the mortgage and save £1kpm over 4 years
20k up front and 8k per year for 4 years to top up the 1k savings.
borrow £52k over 25years save £1kpm for £48k

amount	rate	payment	owing
£52,000.00	2.00%	£220.40	£45,322.62

or if you paid the £423.85

amount	rate	payment	owing
£52,000.00	2.00%	£423.85	£35,164.79

£2k saved over borrowing £100k up front.

for the offset the simple is 4 net borrowing calculations with a carry over 
for each of the first 4 years 

amount	rate	payment	owing
£20,000.00	3.29%	£1,423.85	£3,321.80

amount	rate	payment	owing
£23,322.00	3.29%	£1,423.85	£6,754.76

amount	rate	payment	owing
£26,755.00	3.29%	£1,423.85	£10,302.42

amount	rate	payment	owing
£30,303.00	3.29%	£1,423.85	£13,968.93

Then add that last £20k to go out
£33,969  going forward against the best above of £35,165.

£1k cheaper with the offset.  (with a regular £1,424 going into the pot

if you don't have that much you can do the number crunch and see where you end up.