Comparing a 2.85% 15-year fixed mortgage quote in Hong Kong

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XaviReed

Property investor
Established
I’ve checked the quoted rate against the fee schedule, but I still cannot tell whether the offers are being compared over the same period. The purchase is around HK$10,800,000, and one option shows 2.85% fixed for 15 years; its cost changes once the applicable loan-to-value tier and charges are included.

Rather than choose on rate alone, I’m considering monthly payments, fees, the balance remaining at the end of my likely holding period, and any cost of repaying or moving the loan early. If 15 years is both the fixed period and full term, that comparison will differ from a loan I expect to refinance. What figures should I ask each lender to provide on an identical loan amount and repayment profile?
 
I’d compare cash flows over the period you realistically expect to keep the loan, then show the outstanding balance at the end of that period. Total interest over 15 years is only decisive if you expect to retain this exact mortgage for all 15.

Is 15 years also the full repayment term, or just the fixed-rate period? And is the arrangement fee paid upfront or added to the loan? Those details can change the comparison.
 
Good point. I’m asking the lenders to run the same repayment profile so I’m not comparing different monthly-payment assumptions. I haven’t confirmed how each fee is treated yet.

The loan amount may also change depending on the deposit, which is why the loan-to-value tier matters. I’ll request side-by-side figures at the relevant tiers rather than relying on the advertised example.
 
That should make the offers much easier to compare. I’d put each one into a simple table with: upfront fees, monthly payments, cumulative payments, and remaining principal after years 5, 10 and 15. If you might sell or refinance early, add the applicable repayment charge at each of those dates.
 
One caveat on APR: it’s useful only when the underlying term and fee assumptions are comparable. I wouldn’t let a slightly lower APR outweigh a large difference in flexibility if there is a realistic chance you’ll move or repay early.
 
I’d go further and test an earlier exit even if you currently expect to stay for 15 years. Plans change, and an expensive early-repayment clause can dominate a modest rate saving.

Portability also needs careful reading. The useful question isn’t simply whether the mortgage is described as portable, but what conditions would apply to the replacement property, loan amount and approval at that time.
 
Monthly affordability deserves its own comparison rather than being buried inside total cost. A loan can be cheaper overall but leave too little monthly room for repairs or other expenses.

Also clarify what happens after year 15 if the repayment term is longer than the fixed period. If there is still a balance, the reset basis and payment at a higher assumed rate matter. If 15 years is the entire term, that particular risk disappears.
 
Ask each lender for the same set of figures in writing: payment schedule, all compulsory fees, balance at selected dates, and the cost of repaying at those dates. Then run at least three scenarios: keep for 15 years, refinance earlier, and sell earlier. That prevents the decision from depending on one optimistic timeline.
 
There probably isn’t one winning figure. APR is a screening tool; total cash cost over your likely holding period is the better comparison; and monthly payment is the affordability test. I’d shortlist on those three, then use early-repayment and portability wording as the tie-breaker. Any uncertain clause should be confirmed for the specific Hong Kong loan before treating that flexibility as valuable.
 
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