1.79% + £899 fee or 1.99% + no fee. Which is cheaper?

strawberries1

As per the subject I'm trying to figure out which 5yr fixed works out cheaper. The bank's MA says the 1.99% is £11 more expensive but when I use the MSE comparison I get the below:

1.79% + £899
Mortgage 1: Monthly repayment
£674
Mortgage 1: Cost over 5 years
(This includes the cost of any fees)
£40,413
Mortgage 1: Cost over full term
(This includes the cost of any fees)
£202,067

Mortgage 2: Monthly repayment
£686
Mortgage 2: Cost over 5 years
(This includes the cost of any fees)
£41,159
Mortgage 2: Cost over full term
(This includes the cost of any fees)
£205,797

In any case it looks like the fee payin rate of 1.79% +£899 is cheaper?

TrickyDicky101

Are you borrowing £162k? Which would be over a 25 year term?

If that's the case, you need to compare the amount owing after the 5 year fix assuming you make the same repayments on each projected mortgage (so you'd need to use a monthly repayment figure of £686 for Mortgage 1) - this in essence means you are overpaying on M1 slightly.

After 5 years (ie 60 months) I make it you would owe £135.1k on Mortgage1 and £135.7k on Mortgage2 so taking the fee option is overall better, although there isn't a huge amount in it.

If the mortgage amount required was bigger there would be a bigger effect (ie better benefit) in taking the fee mortgage.