Yeah, the 6% isn’t a true interest figure as it’s calculated monthly on the balance.
If you pay the same amount in each month you can basically say the average amount in the account is 1/2 the final balance, in this case £1800, so it’s actually 3% overall interest. ((£1800/2) x 6%)
Given that overpaying the mortgage will bring your term down and reduce the overall interest amount to be paid i’d say it’s far better to do that.
If you look at an overpayment calculator online, a 125K mortgage over 25 years at 4% would be approx £660 a month. If you overpaid £150 a month for the life of the mortgage you’d save 22K in interest, cutting short the repayments by 7 years. Someone show me a savings account as good as that and i’ll bite your arm off!
Also, a hidden benefit of overpaying is that 3% savings rate is now virtually inflation, so you’re losing money on your savings after tax. If we see interest rate hikes which are very likely then those few years off the end of the mortgage could be a few years at a much higher interest rate, that £150 a month overpayment now could save you a lot of money. I’d overpay.