Advice needed with mortgage switch

indierocker85

Me and my wife are currently in a 5 year fix with Skipton at 2.51%, which we pay £592.34 D.D (plus £7.66 extra) and we are 3 months away from the end of year 2 of a 25 year mortgage. Originally our minimum payment was £592.34, when I made multiple overpayments, Skipton reduced it to £536.31. However, I kept it at the larger amount, so it didnt undo the interest savings of the overpayments, and also rounded it off to £600.

I did a search last night, and discovered that Skipton were offering 5 year fixes for around 1.5%.......

I did some research to see if we could break out of our current deal early, and move to a new 5 year fix with them. We opted for 5 years fix, as quite honestly, who knows what the next 2 years will bring after 2020. When we signed for our 5 year fix initially, the BoE raised base to 0.75% 3 days later. So my gut was right then!

The outstanding mortgage currently is £108899 at time of writing

Anyway, for our LTV of around 69% we were given 3 options, that we could move to, providing we paid an early repayment charge on our current mortgage.

All are five year fixed rates

1.49% with a completion fee of £1995
1.55% with a completipn fee of £995
1.76% with a completion fee of £0

Now, if we were to do this now, still in year two we would have to pay 5% Early repayment charge, which at time of writing would work out £5440. If we wait until 1st of September, it will only be 4%. As a few payments will have been made between now and then, the debt would be around £107779 and the ERC would be £4311. The term would be exactly 23 years.

What I am wondering is, which of the above options works out the best monthly and overall saving?

I did some excel calculations and it seemed 1.55% with fees added on was best, but I am always open to other points of view.

Would it be a better saving if we added the fees onto the mortgage? Or should I pay them up front? Is it wise adding further debt to it? I know its to make a saving in the long run though.

I have been rounding our payment off to £600 a month, with £536.31 being the minimum, and the rest counting as overpayments. I intend on maintaining this amount going forward too, as there will be a lower amount of interest each month and I want to pay it off as quick as can be.
We prefer this option, as its only one to two weeks, if we moved to another provider, it would take months and involve solicitors, the cost of which would outweigh any gain.

Thanks in advance for any help with this