Comparing a 4.62% two-year fixed mortgage quote in Sydney

[WorthyThread]

The fees make the headline rate a poor guide, and I cannot finalise the comparison until I know which loan-to-value tier applies. The purchase I am considering in Sydney is about A$304,000, with one quote at 4.62% fixed for two years.

I want to compare both lenders on identical assumptions. Should I list interest and mandatory fees over those two years, alongside the monthly payment and remaining balance? Portability and early-repayment charges also matter, but I am unsure how much value to assign them. I would also like to account for the risk of the rate resetting if I still have the loan when the fixed term ends.

 

[WorthyThread]

One clarification: A$304,000 is the approximate purchase price, not necessarily the amount borrowed. I haven’t settled the deposit yet because moving into another loan-to-value tier could alter the quote. That makes a straight comparison difficult, so I’m looking for a sensible spreadsheet method rather than choosing the lowest headline rate.

 

[photosAndPage]

I’d compare both offers over the same two-year period using the same loan amount, repayment type and payment dates. List interest plus every unavoidable lender fee, but show principal separately because it reduces the balance rather than disappearing as a cost. Then put the monthly repayment and estimated balance after two years beside those figures.

 

[thinkTheReed]

Are the arrangement fees paid upfront or added to the loan? That missing detail can change both the initial cash needed and the interest calculation. I’d also ask each lender to rerun the illustration using exactly the same deposit and loan term. Otherwise you may be comparing their assumptions rather than their products.

 

[knitsAndAtlas]

I wouldn’t make the two-year cash cost the sole deciding number. That approach naturally favours a cheap short fix even if the post-fix position is unattractive. Run at least one scenario where you refinance after two years and another where you cannot. Portability also deserves careful reading: being described as portable may not mean a future transfer is automatic or cost-free.

 

[amara_wren]

A compact table should expose most of this. Use rows for upfront fees, ongoing fees during the fix, monthly repayment, total payments over 24 months, principal repaid, interest paid, remaining balance, and any early-repayment conditions. Add a notes column for what happens at the rate reset. Keep the loan amount and timing identical across both columns.

 

[theo_cedar]

Also test affordability rather than just expected cost. Put the quoted payment into your budget, then repeat with a higher rate after the two-year fix ends. If only one deposit level leaves enough monthly breathing room for that scenario, the cheaper loan-to-value tier may not actually be the safer choice once the larger deposit has reduced your cash reserve.