Calculating the best deal

Hi All,

Sorry my maths is not the best so I am hoping for someone to perhaps advise... I am looking to release some equity from my property (increase the mortgage) in order to purchase a second home closer to work. I am currently on a Lloyds Mortgage as below

Outstanding Mortgage: £126,779.69 (fixed at 3.39% until Oct 18)
Early Settlement Penalty: £3,543.84

Monthly payment is about £791. If I want to borrow an additional 105k they have proposed that the best way of doing this is leaving the mortgage in place but create an additional borrowing of 105k at 1.99% with no fees until Jan 2020.

The other option is to pay the early settlement figure and remortgage the whole £235k at 1.8% fixed until October 19 - Monthly payments would be about £1277.

My question for those much better at maths than myself is, whilst the monthly payment would be lower by moving the whole mortgage to a new product and paying the penalty is this the right thing to do or am I better running the two mortgages (the fix and the additional borrowing) and then looking to remortgage those in October 18 for the bigger pot of £126k then the next pot of £105k

Thanks in advance.