Comparing a 3.68% 20-year fixed mortgage quote in Mumbai

E

emery_leases

First-time buyer
Established
The quoted rate is 3.68%, but the fee-adjusted cost is the concern. This is for a Mumbai purchase of about ₹69,720,000, with the offer described as fixed for 20 years; the advertised figure changed once the arrangement fee and loan-to-value tier were considered.

I need a comparison that reflects monthly affordability as well as overall borrowing cost. Should I ask each lender for the same principal, repayment schedule, fees and balance at several dates? I also want the exact terms for partial overpayments, full repayment and portability, since a future move could make those conditions more important than a small rate difference.
 
A lower rate with a large upfront fee is uncomfortable, but so is paying more each month merely to avoid that fee. Put both offers on the same loan amount and repayment basis, then compare the monthly payment, total fees, interest paid and balance remaining at dates that matter to you.

APR is useful for screening, not for making the decision by itself. If a fee is added to the mortgage, include the interest charged on it. The result may change depending on whether you keep the loan for the full 20 years or repay it early.
 
Is 20 years both the fixed period and the full loan tenure, or does the loan continue afterward at a reset rate? Also, what principal are you borrowing? The ₹69,720,000 purchase price alone is not enough to calculate payments or compare the loan-to-value tiers.
 
I would not assign much value to portability until the conditions are clear. It may depend on approval for the next property, the new loan-to-value and any change in borrowing amount. Treat it as conditional flexibility, not a guaranteed escape from early-repayment charges.
 
Daan’s point changes the calculation. If the mortgage ends after 20 years, total cash cost over the full term is meaningful. If 20 years is only one pricing period within a longer tenure, you need a stated assumption for the later rate rather than presenting the result as certain.
 
A simple spreadsheet would help: opening balance, monthly payment, interest, principal reduction and every fee. Run each lender on identical dates. Then show the remaining balance and cumulative cash paid after several possible holding periods. That separates the borrowing cost from assumptions about selling or refinancing.
 
The detail that changes my view is the possibility that 20 years may not describe the whole loan on the same terms. An assumed refinance can make the cheaper-looking quote attractive, but that saving depends on future rates, approval and another round of fees.

I would first compare every offer without refinancing over identical dates. Then model a refinance separately. Choosing a lender now is difficult to unwind without cost, while deciding later whether to refinance remains a choice, so the base loan should still work if that option never becomes favourable.
 
For early repayment, ask for the wording covering both partial overpayments and full redemption. You want to know when any charge applies, how it is calculated, whether permitted overpayments are limited, and whether a sale or refinance is treated differently. Those details can matter more than a small rate difference if your plans change.
 
Also test whether contributing more cash to reach a lower loan-to-value tier is actually worthwhile. Compare the fee and interest saving with the extra cash tied up in the property. Don’t cross a tier merely because the rate falls; the reduction needs to justify the lost liquidity.
 
Thanks—my main mistake was using ₹69,720,000 as though it were the comparison balance, when that is the purchase price. I’ll get each lender to confirm the actual principal, whether fees are paid upfront or financed, the full tenure, and what happens after the 20-year fixed period. I’ll run no-refinance and earlier-exit cases separately rather than assuming portability solves everything.
 
For monthly affordability, include more than the scheduled instalment. Upfront fees reduce the cash left after completion, while financed fees increase the balance. Keep enough room that the payment remains manageable alongside the property’s other costs; the mathematically cheapest offer is not necessarily the safest one for cash flow.
 
That approach should make the decision clearer. I’d finish with three columns for each offer: guaranteed cost under the stated 20-year terms, cost if you repay earlier, and uncertain cost under any reset or refinance assumption. Keep portability as a note with conditions rather than assigning it a cash value unless the lender can explain exactly how it works.
 
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