Whst is the best deal out of these 2?

gunner786

Hi guys im going to fix for 5 years rather than 2. Interest rates have made it very tempting so rather than 2 years ar 1.34% im going to go either 1.49%(995 fee) or 1.64% (£0 fee) at 5 years. 
But 1 has product fee and 1 doesnt. Over 5 years which is cheaper?
Over 9 years 2-3 months and a balance of £79400.

dimbo61

Hi the 1.64% deal with no fee works out at £791.28 a month for 5 years.
At the end you will owe £36,738.
The 1.49% deals with the £995 added to the loan works out at £795.90 a month for 5 years.
At the end you will owe £37,065
Approx because " whatsthecost " can't do months so rounded down to 9 years.
Fee free deal works out cheaper I THINK 

MortgageWonders

My math says without product fee works our cheaper over 5 years by around 500 quid or so. 

dimbo61

Are you paying the fee or adding to the mortgage balance ?

getmore4less

dimbo61 said:

Are you paying the fee or adding to the mortgage balance ?

Makes a small difference to the comparison calculation if dome properly. 

getmore4less

The maximum you can save with a lower rate is on an interest only, repayment the savings are always less. 

over 5 years.
£79400 * 0.0015 * 5 = £596

That's less than the fee.
No fee is cheapest.

When that calculation comes out more than the fee then it is worth running the repayment numbers. 

Add the fee make the payment the same and see what's left. 
Bigger the payment the lower the saving if planning to overpay use planned payment not the one calculated by term.