Comparing a 3.83% three-year fix on a £978,900 London purchase

[jade_details]

I have checked the payment on a 3.83% three-year fix for a London purchase of about £978,900, but I am not yet sure it is the cheapest option over the period we may actually keep it. The lower advertised deal did not match the relevant fee and LTV combination.

Because we might move or refinance within three years, I am comparing the payments and upfront charges over that window, along with the mortgage balance left at the end. Portability and early-repayment restrictions could matter as much as a small rate difference, while the reset after year three affects affordability if we stay.

What loan and fee details should I request so the offers can be compared on the same basis? I also need to verify the precise LTV band and whether adding a fee to the mortgage materially changes the result.

 

[bakesAndView]

For a three-year fix, I’d compare the cost over those same three years rather than relying on the headline rate. Include monthly payments, arrangement and application-related fees, then compare the mortgage balance remaining at the end. Two offers can have similar payments but leave you owing different amounts. APR is still useful, but it may reflect a longer period than you expect to keep this deal.

 

[readTheEcho]

What loan amount and arrangement fee sit behind the 3.83% quote? The £978,900 purchase price alone doesn’t reveal the LTV, and that could explain why the advertised rate was unavailable. Also check whether you intend to pay the fee upfront or add it to the mortgage, since that changes both the initial cash needed and the amount financed.

 

[KianCane]

I wouldn’t dismiss APR entirely. It gives a common comparison point and can expose an apparently cheap rate paired with high fees. The caveat is that its assumptions may not match a planned refinance after three years. I’d keep APR in the table, but make the three-year total cost the main comparison and run a separate scenario for staying longer.

 

[miro_ash]

Total cost matters, but monthly affordability would come first for me. A deal that wins narrowly on a spreadsheet is not necessarily preferable if the payment leaves no room for repairs or other costs. I’d also model the payment after year three at a meaningfully higher rate, without assuming refinancing will definitely be cheaper or available on the terms you want.

 

[timo.flint]

Ask each lender or broker to spell out the moving and early-exit scenarios, not just say the mortgage is “portable.” What conditions would apply at that point, could the full balance move, and what happens if the replacement property or borrowing amount differs? Separately, compare early-repayment charges and any permitted overpayments during each year of the fix.

 

[readTheEcho]

One more point on the property comparison: price per square metre may help you judge the London purchase, but it won’t make the mortgage offers comparable. For financing, use the actual loan amount and property value behind each quote so the LTV assumption is identical. Otherwise you may accidentally compare products from different pricing tiers.

 

[FairEcho]

A simple spreadsheet should settle most of this. Give every offer the same three-year horizon and list: upfront cash, all mortgage fees, monthly payments, total paid by month 36, balance then, and the cost of leaving early at a few plausible dates. Add separate columns for portability conditions and overpayments. Finally, test several post-fix rates rather than building the decision around one optimistic refinance assumption.