Comparing a 2.73% 30-year fixed quote on a $1,070,000 New York purchase

F

frame.grand

Mortgage adviser
Established
The 2.73% quote is driving the comparison, but it is not the lowest rate I first saw advertised. This is for a New York purchase of about $1,070,000 over 30 years, and lender fees plus the relevant loan-to-value band account for some of the difference.

Should I rank the offers by APR, by interest over the years I am likely to retain the mortgage, or by all cash paid once charges are included? My first branch is whether the monthly payment remains comfortable without refinancing. The second is how the offers compare if I sell or refinance earlier, including any repayment charge and remaining balance. I would also like to know what conditions sit behind the lender's use of “portability.”
 
I would compare total cash cost over a realistic holding period, not over all 30 years unless you genuinely expect to keep this mortgage that long. Include upfront lender charges, the monthly payments and the balance remaining at the end of that period. APR is a useful first filter, but it may not match your likely refinance or sale timeline.
 
Is $1,070,000 the purchase price or the amount being borrowed? Also, how much are you putting down, and does 2.73% require points or other upfront charges? Without those details, two lenders can appear to quote the same rate while offering materially different deals.
 
A realistic holding period is useful, but relying on one refinance date creates another risk. The replacement loan may be unavailable or unattractive when that date arrives.

I would first choose a payment that remains manageable under the current mortgage, since affordability is the hardest problem to undo. After that, compare the fees, interest and remaining balance at several possible exit dates rather than letting one favourable timeline decide the result.
 
Agreed on testing more than one horizon. A simple comparison at, say, an early move, a medium holding period and the full term would expose where the fees are recovered. Tariq, also ask each lender to price the exact same loan amount and loan-to-value tier. Otherwise the advertised-rate comparison is not really like for like.
 
The word “portability” needs clarification from the lender. Do they mean the existing loan can actually move to another property, that a buyer can take it over, or merely that you can apply again with the same lender? Those are very different outcomes. I would not assign it any value until the lender explains the conditions in writing.
 
Build one small table for each quote: rate, APR, upfront fees, cash required at closing, monthly principal and interest, remaining balance at your chosen dates, and any charge triggered by early repayment. Then add taxes, insurance and other property costs separately when testing affordability, since those are not created by the mortgage rate but still affect the monthly budget.
 
One more caveat: with a 30-year fixed rate, “rate-reset risk” should not be treated like it would be for an adjustable loan. The uncertainty is more about whether you later choose or need to refinance, and what terms are available then. I’d ask for the fee-inclusive cost at several dates and make the decision work even if no refinance happens.
 
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