Overpayments

i rang my bank today to make an overpayment on my mortgage and i enquired if i make an overpayment of 200 a month how many years does this take off my mortgage and i could not get an answer. i was told that the overpayments sit in an account till they reach 2007 euro before they are taken off the principle. so my question is, is it better to open a savings account and save the 2007 euro and maybe the few quid in interest and then make 1 off lump sum payments of 2007 euro. Any recommendations? what do others do?

What bank is that?

PTSB. Their terms and conditions of the overpayment below make no mention to any of what i was told on the phone in fact to me it seems to say that it is immediately taken off the mortgage
"
Overpayment[FONT=Akzidenz Grotesk BQ,Akzidenz Grotesk BQ]" is any regular monthly or other periodic payment which exceeds the Scheduled Monthly or Other Periodic Repayment. Such payments will be credited to the mortgage account immediately and interest will be adjusted accordingly, thus accelerating repayment of the loan and reducing the interest charge."
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Hmm, check the T&C's on your loan offer. Also, probably better to tell them to take it directly off the principle rather tan putting towards interest.

There was thread on this recently in relation to PTSB:

http://www.askaboutmoney.com/showthread.php?t=89395