Comparing a 6.41% three-year fixed mortgage quote in Mumbai

N

new_atlas

First-time buyer
I’m comparing mortgage offers for a Mumbai property purchase around ₹51,350,000. One lender quoted 6.41% fixed for 3 years, but its advertised rate was lower; arrangement fees and the loan-to-value tier explain part of the difference.

Would you compare lenders using APR, interest paid during those three years, or total cash cost including fees? I’m also weighing monthly affordability, portability, early repayment terms and the risk of the rate resetting after year three.
 
For the initial comparison, I’d calculate the total cash leaving you over the same 36 months: payments, arrangement fees and any other compulsory charges, less the principal repaid. That shows the financing cost during the period you actually know.
 
APR is still useful as a warning sign, but only when every lender is using comparable assumptions. A long-term APR can obscure an expensive three-year deal if it assumes a favourable rate after the fixed period.
 
I wouldn’t limit it to 36 months. That quietly assumes you can refinance on acceptable terms at exactly the right time. The better-looking short-period offer could be worse if rates rise, your circumstances change or switching involves another round of fees.
 
Fair objection. I’d keep two views rather than choose one: a firm three-year cash-cost comparison and a range of post-fix payment scenarios. The first compares today’s offers; the second shows how much risk each one leaves with the borrower.
 
Is ₹51,350,000 the purchase price or the proposed loan amount? Without the deposit, loan principal and full repayment tenure, neither the monthly payment nor the effect of the LTV tier can be compared properly.
 
Also separate fees paid upfront from fees added to the loan. The headline amount may be identical, but a financed fee accrues interest and leaves a slightly higher balance at the end of the fixed period.
 
The LTV detail may answer a lot here. Yara, ask the lender which property value and loan amount it used to place the application in that tier. Then you can see whether a larger deposit would actually save more than the extra cash committed.
 
“Portable” needs unpacking. Does it simply mean the existing rate may move to another acceptable property, or does the whole loan transfer unchanged? Ask what happens if the new purchase costs more or less, and get the conditions in the offer paperwork.
 
My spreadsheet would have one row per lender and columns for: starting loan, upfront cash, monthly payment, total paid over 36 months, principal remaining, early-repayment cost at several dates, and the payment after reset under a few rate assumptions. That prevents the advertised rate from dominating the decision.
 
Early repayment could outweigh a modest rate difference if there is a real chance of selling, receiving a lump sum or refinancing before year three. The exact restrictions are product-specific, so I’d compare the written terms rather than a general description from the lender.
 
I see why you would use the three-year fixed period as the main comparison, but I would hesitate to make it the whole decision horizon. It tells you how long the 6.41% rate is known, not how long the property and debt may remain with you.

If a sale or refinance within three years is genuinely likely, compare fees, payments, remaining principal and early-repayment terms over that period. If you expect to hold longer, use the same precise three-year calculation but add reset scenarios and test whether the later payments remain affordable. The first choice is relatively flexible; the long-term affordability assumption is harder to undo.
 
That’s true, although assumptions become less reliable further out. I’d compare the known period precisely, then stress the monthly payment after reset. The important affordability question is not just whether today’s payment fits, but how much room remains if it rises.
 
Confirm what “fixed for 3 years” means in the actual offer and how the rate is determined afterward. The reset wording matters more than any informal expectation that refinancing will be available.
 
Once the figures are complete, calculate the break-even point for the higher fees. If the fee-heavy offer only becomes cheaper near the end of the fixed period, it is a poor fit for someone likely to repay or move earlier.
 
Convert every difference into rupees rather than comparing percentages alone. For each offer, use its own amortisation schedule to total interest and compulsory fees, then record the outstanding balance after month 36. Total payments by themselves can mislead because part of each payment reduces the debt.
 
One more distinction: portability is not the same as guaranteed refinancing. It may help with a move, while refinancing depends on whatever terms and eligibility apply later. I wouldn’t use portability to justify an otherwise uncomfortable reset payment.
 
A practical order would be: obtain itemised offers, confirm the LTV inputs, compare 36-month cash cost and remaining balance, test reset affordability, then read the early-repayment and portability wording. If two offers remain close, favour the one whose downside you can comfortably absorb.
 
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