I am planning to apply for one of Santander mortgages for £220,000.
There are two options (both are fixed rates for 2 years):
Option 1: 1.34% with £999 fees (added to the loan), then 4.49% SVR.
Option 2: 1.64% with no fees, then 4.49% SVR.
As per moneysavingexpert comparison results, I get the following figures:
Option 1: Monthly 'fixed' payment is £746 with a cost over 2 years of £17,905 (Remaining mortgage at end of 2 years: £208,869)
Option 2: Monthly 'fixed' payment is £774 with a cost over 2 years of £18,573 (Remaining mortgage at end of 2 years: £208,452)
So which option is really better over the two years? The first option where I pay less but the remaining mortgage is higher or the second option where I pay more but the mortgage remaining is less?