Portugal mortgage quote: comparing 6.35% fixed for two years on a €1,224,000 purchase

[fair_bridge]

Choosing the wrong comparison could make a cheaper-looking mortgage cost more over the period I actually keep it. The Lisbon purchase is around €1,224,000, and one offer is fixed at 6.35% for two years. Its fees and LTV band mean the headline rate does not tell the whole story.

I’m now thinking of comparing each quote over the same 24 months: upfront cash, monthly payments, fees added to the balance and the amount still owed at the end. Then I would stress-test affordability when the fixed period expires. I also need to check early-repayment charges and portability rather than assume refinancing will be straightforward. Apart from the loan amount, LTV and full term, what inputs need to be identical for the comparison to be meaningful?

 

[CandidPath]

For a two-year fix, I’d compare total payments and all upfront fees over 24 months, then note the outstanding loan balance at month 24. Two offers can have similar cash outlay but leave you owing different amounts. APR is still useful, but it may not match your likely holding period. I’d also test whether the payment remains affordable after the fixed rate ends.

 

[runsAndRoof]

The missing details are the actual loan amount, LTV, full mortgage term and whether the arrangement fee is paid upfront or added to the loan. Without those, 6.35% cannot really be judged against another quote. What does the offer say happens after year two, and are you comparing every lender using exactly the same deposit and repayment term?

 

[ames_rents]

I’d be cautious about focusing only on the first 24 months. That approach can make a cheap introductory period look best even if the later reset is uncomfortable. On the other hand, APR can also depend on assumptions that may not reflect an early refinance. I’d keep both: a like-for-like two-year comparison and a longer scenario where you do nothing when the fix expires.

 

[RoundCrane]

Leila’s balance-at-month-24 point is important. A simple spreadsheet could list: cash deposit, fees, 24 monthly payments, balance after two years, and the cost of repaying or refinancing at that point. Then run another row where you keep the mortgage after the reset. I wouldn’t assign much value to portability unless the written terms clearly fit the kind of move you might make.

 

[path.tidy]

Also stress-test the monthly payment rather than treating refinancing as the plan. Try the quoted payment, a higher reset payment, and a case where you must stay with the same loan for longer than two years. Ask each lender for the same repayment schedule and written early-repayment figures. That should expose whether the lower advertised rate is genuinely cheaper once the LTV tier and fees are included.