Soldato
It's not as simple as that. 3 year fix has lower interest rate than a 5 year fix. So it could be £10k savings. If he also uses the extra £40 to make overpayments it could be £12k saved.
If that's enough to push him into a better LTV bracket come deal time then it's even more savings on top so it turns into £20k. Will he save that over 2 years with a 5 year fix? Only if interest rates skyrocket which nobody in Britain can afford
Your maths are terribly out here. For the interest difference to be £40 then the rate is either very close, or the loan is quite small, or both!. You probably need to drop a 0 from all your saving £2000 here and there stuff, forget the £20k thats nonsense.
The only thing that affects total repayable to that sort of extent is massively bringing down the term.
He will save £40x36 = £1440. At the end of the term of 3 years the balance outstanding on both will be the same give or take a few £ due to rounding with rate differentials on an amortising loan. So with the saving he could in theory pay off the £1440 and be £1440 better off. At that point however he needs to set a new deal, only guesswork can be made to what the market place could be then, taking a pessimistic or optimistic view of the marketplace will alter your opinions.
What we can say is that to be in the same position if he fixed for 5 years in the 2 years between the 3 year finishing and the 5 year finishing he would need the rate he pays to be 1.5x the difference hes saving now.
I.e. if he would pay an extra £60 per month once off his 3 year deal. 24X£60 is £1440. So at the end of 5 years he would be in the same position.