Comparing a 3.80% three-year fixed quote on a $1.385m New York purchase

[yuki_hope]

The monthly payment needs to remain comfortable now, but I also do not want to choose a cheap-looking deal that becomes expensive at the reset. The purchase is in New York at about $1,385,000, with one quote at 3.80% fixed for 3 years.

Once lender charges and the applicable loan-to-value band are included, the headline rate is not enough to rank the options. For a realistic three-year holding period, would you compare APR, interest over 36 months, or all cash paid after allowing for principal reduction?

I’m checking portability and early-payoff conditions as well, but the least reversible risk may be the balance left when the fixed term expires. How would you model that reset alongside present-day affordability, and which loan details need to be identical before the quotes can be compared fairly?

 

[CandidPath]

If three years is your realistic comparison period, I would calculate the financing cost through month 36: lender fees plus payments made, less principal repaid. That prevents a low advertised rate with high upfront fees from automatically winning. Keep APR alongside it, but don’t rely on APR alone if you expect to refinance or sell after the fixed period.

 

[esme.snow]

The missing number is the actual loan amount, or at least the down payment. On a $1,385,000 purchase, a change in loan-to-value tier could matter more than a small rate difference. Also, are all quotes using the same loan term and the same assumptions about fees being paid upfront versus added to the balance?

 

[esme.snow]

I’d also separate affordability from cost. One quote can be cheaper over 36 months but still have a higher required monthly payment because of the repayment schedule. Compare identical loan amounts and terms first, then stress the payment after year three rather than assuming refinancing will be available on equally favorable terms.

 

[esme.snow]

A simple spreadsheet should settle most of it. For each lender list: cash fees at closing, monthly principal and interest for 36 months, balance remaining after payment 36, any early-repayment charge, and the rate-reset method. Use the same intended down payment in every column. Portability should only receive value if the lender confirms exactly how it would work for this loan.

 

[uma_valuations]

I’m not convinced a strict 36-month cost comparison is enough unless you are quite certain about moving or refinancing then. The cheapest three-year outcome could expose you to the least attractive reset terms. I’d pay some attention to the downside case: no refinance, no sale, and a meaningfully higher payment after the fixed period.

 

[esme.snow]

That’s fair, although I still think the 36-month figure is the cleanest starting point. It just needs a second scenario for years four onward. Otherwise you can end up paying a definite fee today to avoid a future risk that may never arise. Compare the known three-year cost, then separately decide what the reset protection is worth to you.

 

[runsAndTable]

What does “portable” mean in the paperwork you received? Is the existing rate transferable to another property, or does moving merely allow a new application without one particular charge? Those are not economically equivalent. I would ask the lender for a worked example involving a sale during the three-year period rather than relying on the label.

 

[alba.shore]

Don’t overlook the break-even point on the arrangement fee. Divide the extra upfront cost by the monthly saving against the next-best quote. If break-even arrives near the end of the three years, the lower rate offers little margin for an earlier sale or refinance. If the fee is financed, include the resulting balance and interest rather than treating it as cash paid today.

 

[theo.east]

I would request matching written illustrations from the lenders using the same loan amount, down payment, term and closing date assumption. Then compare APR, 36-month net cost, monthly payment, remaining balance and the early-exit amount side by side. For a three-year fix, I’d also budget against a less favorable reset instead of making the purchase affordable only if refinancing goes perfectly.