This is a common dilemma for those with disposable income: do they squirrel it away in a savings account or pay more off their mortgage to become free of one of the biggest debts they have during their lifetime?
With interest rates so low it would definitely be preferable to overpay on your mortgage rather than keep your savings in a low-interest cash savings account. Your mortgage rate is no doubt currently at one of the lowest levels it ever has been, so if you overpay at 5% you will save yourself interest and reduce the length of the mortgage by a good few years. By overpaying you will also protect yourself against a shock to your expenditure when interest rates do eventually rise.
If you have more than one mortgage, the rule of thumb would be to overpay the one with the highest interest rate to get rid of the most expensive debt first.
The pros and cons of this would obviously need to be considered in relation to your circumstances, as there is no right or wrong answer. There are also other options that may be more beneficial: instead of overpaying on your mortgage, you could pay into your pension if you are able to, as this will receive tax relief from the government. Also, there is no guarantee that your mortgage provider will allow you to underpay if you run into financial difficulty and need access to the additional cash – property is obviously less accessible than cash or investment savings.
Definitely something to consider and possibly take advantage of whilst interest rates remain at such a low level.