Which rate is better? A maths question

ronctlsmile

Dear all,

Something about maths. I hope you could shed the light with me. I happened to copy some of the rate from a bank. Here is its offer:

1.) Mortgage/ Initial rate/ Followed by our SMR
2 yr Tracker / 1.24% / 3.74%
Base rate +0.99%

Overall cost for comparison / product fees/ monthly payment
3.3% APRC / £999 / £687.19

2.) Mortgage / Initial rate / Followed by our SMR
2 yr Tracker / 1.64% / 3.74%
Base rate +1.39%

Overall cost for comparison / product fees / monthly payment
3.3% APRC / None / £720.34

Comparing 1 and 2, if I subtract 687.19 from 720.34, then I times the difference 33.15 with 24 months. The result is 795.6. Based on it, I take 795.6 out of 999. The remaining is 203.4. If I take this decision, does it mean option 2 is better as the product fees costs more than I pay more in the interests?

NOVAMET21

Option1: 999 + 687.19 x 24 = £17,491.56


Option2: 720.34 x 24 = £17,288.16


Diff = £203.4 and yes you are correct option 2 will be cheaper by £203.4 over 24 months.