Comparing a 4.69% three-year fix on a £713,700 London purchase

[MellowRadar]

The headline rate is not giving me a fair comparison. My specific concern is the cost over the period I am actually fixing for.

After 76 days, I have a 4.69% quote on a London purchase of about £713,700, fixed for three years. The fee and my loan-to-value band make it less attractive than the advertised rate first suggested. Should I compare total payments and fees over those three years, the interest charged in that period, or APR?

I am treating monthly affordability as a separate limit. Portability and early-repayment conditions also matter because I may need flexibility, while the possibility of remaining on the loan after the fix is less certain.

 

[yuki.holt]

For a three-year fix, I’d compare total cost over those three years: monthly payments plus all lender fees, less the capital repaid. APR can be misleading if it assumes you remain on a later rate that you never intend to pay. Keep monthly affordability as a separate test, because the cheapest total deal is no help if its payments leave no breathing room.

 

[ember.full]

What loan-to-value tier are you actually in, and would the arrangement fee be paid upfront or added to the mortgage? Without the loan amount, two 4.69% quotes can produce quite different costs. Adding the fee also means financing it, so I would model both options rather than treating it as a one-off line item.

 

[timber.full]

I wouldn’t dismiss APR entirely. A three-year-only comparison quietly assumes you can refinance on schedule and at an acceptable rate. If the property value, income or lending market works against you at that point, the rate after the fix suddenly matters. APR is imperfect, but it at least exposes some of that longer-term cost.

 

[MaraSage]

Build three columns for each lender: cash required before completion, monthly payment during the fix, and balance remaining after three years. Then add any arrangement or valuation-related lender fees that actually apply to the quote. Separately note early-repayment restrictions and the exact portability wording. A portable product is not necessarily the same as a guaranteed transfer to another property.

 

[MellowRadar]

Thanks, this clarifies why I was getting conflicting answers. I had been looking mainly at the headline rate and APR, but I’ll now compare total cash paid and the remaining balance at the end of year three. I’ll also run the fee both upfront and added to the loan. The LTV tier appears to be the main reason the advertised rate was not the rate offered.

 

[nia_sage]

Also stress-test the monthly payment after the three-year fix rather than only asking whether 4.69% is affordable now. You don’t need to predict the future rate precisely; try several higher reset-rate assumptions and see where the household budget becomes uncomfortable. That makes the trade-off between a shorter fix and payment certainty much clearer.

 

[makeTheCanvas]

One caveat on counting every pound paid over three years: capital repayment is not a cost in the same sense as interest or fees, because it reduces the balance. Compare interest plus fees for pricing, but still show the full monthly payment for affordability. Otherwise a repayment structure that clears more principal can incorrectly look more expensive.

 

[yuki.holt]

Agreed on separating principal, although the remaining balance still belongs in the comparison. If one offer costs slightly more during the fix but leaves a meaningfully smaller balance, ignoring that would skew the result. I’d choose one assumed refinance date for every lender and avoid giving any offer credit for a favourable future rate.

 

[bakesAndView]

Before deciding, ask for the figures in writing for the same loan amount, term and repayment basis. Then check what happens if completion is delayed, if you repay early, or if you move during the fixed period. After a 76-day wait, it is especially worth confirming how long this particular quote remains usable rather than relying on the original advertised terms.