Comparing a Polish mortgage quote at 8.25% fixed for 15 years

A

ames.ives

Mortgage adviser
The lender presents the headline rate as the obvious comparison, but I am hesitant to rely on it when the underlying assumptions differ. This is for a Warsaw purchase of roughly PLN 3,693,000. One illustration shows 8.25% fixed for 15 years, yet the applicable loan-to-value band and arrangement charge made it less attractive than the advertised figure suggested.

I plan to rebuild the quotes using the same loan amount, term, payment dates and comparison period. After that, should the deciding measure be APR, the cost over the years I expect to keep the mortgage, or the monthly payment? I also want to compare early-repayment terms and portability, since an expensive restriction there may be harder to undo than a higher upfront fee.
 
I would rebuild both illustrations using the same loan amount, repayment term and payment dates. Then compare the monthly payment and all compulsory fees over the period you realistically expect to keep the mortgage. APR is a useful first filter, but it can mislead when the lenders have based it on different assumptions.
 
What is the actual loan amount and total mortgage term? The purchase price alone does not reveal the loan-to-value, and that appears to be one reason the advertised rate changed. Also, is the 15-year fixed period the entire mortgage term, or would there be a rate reset afterward?
 
One point in favour of APR: it forces at least some fees into the comparison instead of letting a lender highlight only the nominal rate. I wouldn’t discard it. I’d use APR to narrow the field, then calculate the cash cost for your likely holding period. A large upfront fee matters much more if you refinance or sell relatively early.
 
The total mortgage term may extend beyond the 15-year fixed period, so I’m asking both lenders to show clearly what happens after that point. I’m also going back for illustrations using identical loan amounts and repayment assumptions. The loan-to-value tier is still a moving part because the final deposit and valuation need to be aligned.
 
I wouldn’t put an assumed refinance into the main comparison. It can make an expensive quote appear acceptable based on a future rate that nobody has offered you. Compare the contractual payments and fees first. You can then run refinancing as a separate scenario, including the possibility that rates, valuation or eligibility are less favourable later.
 
Portability also needs unpacking. Does it simply mean you may apply to transfer the mortgage, or are the existing rate and terms actually preserved? Ask what happens if the replacement property costs less, if you need additional borrowing, or if the sale and purchase do not complete together. The label alone is not enough to value the feature.
 
Monthly affordability deserves its own stress test rather than being treated as a by-product of the cheapest total. Try the quoted payment, a higher payment after any reset, and a period with reduced household income. A slightly cheaper long-term option is not necessarily better if its required monthly outflow leaves no practical buffer.
 
For early repayment, ask each lender to calculate the result for the same hypothetical overpayment date and amount. You need to see both any charge and how the overpayment changes later interest or the repayment schedule. Exact treatment will depend on the Polish contract, so I would rely on the written terms rather than a general description from the comparison table.
 
At this point I’d make a simple cash-flow sheet with one column per lender: upfront fees, monthly payments, planned overpayments, balance remaining at the end of your chosen comparison period, and any exit cost. Run it for several horizons rather than only 15 years. That should expose whether the lower advertised rate is genuinely cheaper or merely shifts cost into fees or later years.
 
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