A heat pump water heater completely separate from the oil boiler will be a cheaper way to heat hot water, and would allow you to run the boiler at a lower and more efficient temperature. With most tankless coils you need to keep the boiler at 160F or higher to get reasonable hot water performance out of it, but if you're only using it for space heating you can set the low-limit down to 140F, which reduces the idling losses of the boiler by quite a bit.
The heat pump water heater will reduce the boiler room by a couple of degrees as well, which reduces the heat loss out of the house, and during the summer months it will be dehumdifying a bit.
Since money is finite I'd be remiss in pointing out that you might get better bang/buck out of installing a high efficiency mini-split heat pump and heating a large space heating zone with it. It's ~2x the , but would be 4x the oil savings, and will typically pay for itself in less than 3 heating seasons at recent years' oil pricing. It's about half the cost of heating that zone with oil with an 85% efficiency boiler.
Also, if it's a basement boiler room and it isn't insulated the greater fraction of that idling loss of the boiler is lost through the ~R1 of the exposed above grade foundation + R2 band joist, not to mention the huge air leak between the foundation and foundation sill (a leak larger than all window & door leakage combined in most homes that have not been air-sealed with blower-door guidance.)
The TWZ150 has 179,000BTU/hr of output which is a RIDICULOUSLY oversized unit for heating a 2200 square foot house. Tighened up a bit and with storm windows or clear-glass double panes the heat load of that place probably under 50,000BTU/hr with an uninsulated foundation, and would be be under 40,000 BTU/hr. Oversizing was often done to improve domestic hot water performance, but 3-5x oversizing for the space heating loads takes a real toll on the performance, especially when the place is cut up into three zones, probably NONE of which has enough heat emitter to deliver the whole burner output into the space, which means it probably short-cycles with burn lengths of 2-3 minutes tops. Turn up the thermostat on your smallest zone (smallest being the zone with the least amount of radiator or baseboard), turn the other zone stat down, then time the burns and report back. A short-cycling 85% AFUE boiler 4x oversized for the design condition heat load will run at about 70% as-used AFUE, with a large fraction of the difference being dumped as standby overheating the boiler room, and up the flue during ignition cycles. There are retrofit controllers that can tame that a bit, but let's first see if it's really necessary- if you have a lot of high volume high mass radiator it might be doing OK, but if it's all fin-tube baseboard I'd be surprised.
This boiler is cold-start tolerant but you need to set up the controls for cold-starting, which would be the right thing to do once you've divorced the domestic hot water heating function from the boiler. The manual (linked to above) discusses how that is done, and you may have to replace part of the controls to achieve that end. (I didn't read the thing cover to cover nor will I, but YOU probably should.)