Should I switch to an offset mortgage?

Q I have 15 years left on a repayment mortgage and, because my lender has consistently refused to drop its rates, I am paying 5.44%. I have around £45,000 in savings, which I am considering offsetting against the remaining £83,000 on the mortgage. My lender's offset mortgage product has been withdrawn, so it will mean a change in lender. Does it make sense to do this or, with early repayment fees, legal costs and new mortgage set-up costs, would I not really benefit? At the moment I make around £150 a month in overpayments. Am I right in thinking that with an offset mortgage saving this money instead of paying extra mortgage would have the same effect? CB A Given the interest rate you are paying, it probably would be worthwhile switching your mortgage, even taking into account all the various fees you will have to pay. But to find out for certain, use the Guardian's mortgage switching calculator . It would also make sense to switch to an offset mortgage because, overall, you would pay less interest – consequently the interest you save reduces your loan more quickly and helps to pay it off earlier than with a conventional mortgage. The other big advantage of offsetting a savings balance – and in some cases, your current account balance as well – is that you are effectively earning interest on your savings at the same rate as your mortgage. But unlike a normal savings account, because you are not actually earning interest there is no tax to pay on it. This means that if the mortgage rate is 3.75% and you are a basic-rate taxpayer, you are effectively getting a before-tax savings rate of 4.69% – more if you pay tax at a higher rate. Finally, you are correct in thinking that saving the extra £150 a month rather than using it to overpay the mortgage has exactly the same effect of reducing the amount of the mortgage loan on which interest is charged.