Comparing a 5.44% 10-year fixed mortgage quote in Hong Kong

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XaviReed

Property investor
Established
A closer look at the illustrations has created another question: the apparent rate advantage may come from different assumptions rather than a better loan. The purchase is a serviced apartment at about HK$6,942,000, and one offer fixes 5.44% for 10 years, but the lenders apply different fees and loan-to-value tiers.

Should I compare them over the period I expect to retain the mortgage, using interest, arrangement charges and the remaining balance, instead of relying mainly on APR? I also need to test an early sale, refinancing before the fixed term expires, portability, repayment penalties and the payment after the fixed rate ends. What would be the cleanest way to put both offers on equivalent assumptions?
 
APR has value as an initial comparison, but I’d hesitate to rely on it while the lenders are modelling different terms. First decide how long you are likely to retain this particular mortgage.

If you expect to keep it for the full fixed period, compare interest, fees, payments and the balance after 10 years. If early repayment or refinancing is plausible, use that earlier date and add every charge it would trigger. A year-by-year table using the same loan amount and term for both offers should make the difference much clearer.
 
Are both lenders using the same down payment and loan term? A different loan-to-value tier could explain more of the gap than the headline rate. Also ask whether each lender is treating the serviced apartment the same way for lending purposes; otherwise you may not be comparing equivalent offers.
 
One more missing figure is the balance outstanding at the end of your chosen comparison period. Two loans can produce similar monthly payments but leave different balances, so adding up payments alone can mislead. I’d model at least three outcomes: keeping the loan for 10 years, repaying early, and refinancing before the fixed period ends.
 
I wouldn’t give APR top priority here. It can compress fees and interest into one number while hiding the terms that matter if plans change. Get each lender to confirm the early-repayment cost, whether portability actually applies to this property and loan, and the post-fixed-period basis. Then stress-test the later monthly payment rather than assuming refinancing will be available on favourable terms.
 
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