Comparing a 7.45% three-year fixed mortgage quote in France

H

HandyHarbor

Buyer
Established
The lender presents this as a straightforward three-year fix, but I am not convinced the headline number tells me enough. The Paris property is about €639,400, and the quote is 7.45%; fees and the applicable LTV band make it difficult to compare with other offers.

Should I calculate the full cost over the three years I expect to keep the deal, rather than rely mainly on APR? I also want to compare the monthly payment with my own comfortable limit. Before assuming I can switch later, I am checking early-repayment charges, portability and what rate applies when the fixed period ends.
 
I’d calculate the all-in cost over the three-year fixed period: interest, arrangement fees and any other compulsory charges. APR is useful when offers use the same term and assumptions, but it can obscure the practical difference if your likely holding period is only three years. Also compare the monthly payment against your comfortable budget, not merely what the lender will approve.
 
What happens after the fixed period? That missing detail could matter more than a small difference in fees. Ask for the payment under the post-fix rate formula and whether there is any cap or floor. You also need the actual loan amount and LTV tier to compare offers properly; the €639,400 purchase price alone doesn’t establish either.
 
I wouldn’t make a three-year cost comparison the main test unless Pablo is genuinely likely to sell or repay then. Refinancing is an assumption, not an exit guarantee: rates, affordability or the property valuation may look different in three years. I’d compare both the initial all-in cost and a less favourable rate-reset scenario.
 
That’s helpful. I was treating refinancing after three years as the default, which is probably too optimistic. I’m going back for a breakdown showing the loan amount, LTV tier, every compulsory fee, the balance after three years and example payments after the reset. I’ll also ask whether portability actually preserves the rate and what early repayment would cost in different years.
 
Good approach. One extra comparison: separate upfront fees from interest rather than folding everything into one percentage. A large arrangement fee hurts disproportionately if you refinance or sell early, while the rate matters more the longer the loan remains in place. If fees are added to the mortgage, include the interest charged on them too.
 
Put each lender into the same simple table: cash needed at completion, monthly payment for years one to three, compulsory fees, balance at the end of year three, early-repayment cost, and payment under the stated reset terms. Add a column for portability conditions, but don’t assign it much value unless the lender explains exactly when it applies. That should make the advertised rate far less distracting.
 
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