Comparing a 3.49% three-year fixed quote on an $850,000 New York purchase

[direct_map]

I have checked the quoted rate, fees and loan-to-value band, but I am still unclear about the fairest comparison period. The offer is 3.49% fixed for three years on a New York purchase of roughly $850,000; the headline advertisement was cheaper before the other terms were applied.

My instinct is to compare the cash paid over those three years, including interest and fees, and then look at the principal still outstanding. APR is useful, although it may give a different impression if I do not keep the loan for its assumed duration. I am also checking portability and any charge for repaying early.

Would you run a second comparison beyond year three in case refinancing is unattractive? The initial monthly payments are close enough that a rate reset or lack of flexibility could decide it, especially if either payment would stretch the monthly budget.

 

[nia_sage]

I’d compare total cost over the three-year period you actually expect to keep the loan, not APR alone. Include interest, arrangement fees and any costs triggered by your likely repayment plan. Also compare the remaining principal balance at the end of year three; two quotes with similar monthly payments can leave you in different positions.

 

[woodworksAndWorkshop]

That works only if the three-year horizon is realistic. If refinancing is merely an assumption, I would also model the payment after the fixed period under a few higher-rate scenarios. A cheaper first three years may not compensate for uncomfortable rate-reset risk, particularly if your monthly affordability is already tight.

 

[AveryGray]

What loan-to-value are you actually being quoted at, and would a slightly larger down payment move you into another tier? That could matter more than a small rate difference. I’d also ask whether you genuinely expect to move, repay early or refinance within three years, because each answer changes how much those flexibility terms are worth.

 

[mapTheVale]

I’d be cautious about assigning much value to portability until the exact conditions are clear. It may sound useful, but it only matters if it works for the kind of move and timing you might make. Put each quote into one sheet using the same loan amount and three-year comparison date, then list fees, monthly payments, total interest, remaining balance and early-repayment cost separately.

 

[woodworksAndWorkshop]

I slightly disagree with treating total cash paid as the main number. Principal payments are cash out, but they build equity, so combining them with interest and fees can make one loan look worse without reflecting the lower balance. I’d compare unrecoverable costs first, then remaining principal, while keeping monthly payment as a separate affordability test.

 

[nia_sage]

Agreed on separating cost from cash flow. APR is still useful as a consistency check, but it may not represent a three-year exit if its assumptions run longer. I’d request itemized quotes based on the same purchase price, down payment and date, then test two paths: refinance after three years and keep the loan through the reset. That should show whether 3.49% or the flexibility terms are driving the better choice.