Sanity-checking a 5.73% five-year fixed mortgage quote in Sydney

K

KianHolt

Homeowner
Choosing on the headline rate could leave us with an unaffordable payment or expensive exit terms for five years. I want to compare the full offers before committing.

The Sydney purchase is around A$1,178,000, and after 109 days in the process we have a quote for 5.73% fixed over five years. Once the fees and our lending tier were applied, the cheaper rate shown in the promotion was not the deal available to us.

Should I compare interest and lender charges over the same five-year window, with the remaining balance shown separately, or rely more heavily on the published comparison rate? I also need to test the monthly payment and understand portability and early-repayment costs. Given how long the process has taken, I will verify the quote’s expiry date rather than assume its terms still stand.
 
I’d compare total cash cost over the same five years, but also show the loan balance remaining at the end. Payments alone can mislead if two options reduce principal at different speeds. Use the same loan amount, repayment type and start date for each quote, then add every lender fee you would actually pay.
 
Is A$1,178,000 the purchase price or the amount borrowed? Without the deposit and resulting LTV, nobody can really assess why the advertised rate disappeared. I’d also ask whether the quote is still valid after a 109-day process and whether any fee is payable before settlement or merely added to the loan.
 
A$1,178,000 is the purchase price, not the loan amount. The LTV treatment is exactly where the comparison became messy, so I’m going back for written figures using one consistent loan amount. The 109 days is how long it has taken from the initial enquiry to getting this quote, which is another reason I don’t want to rely on the original advertisement.
 
I wouldn’t automatically choose the lowest five-year total. If there’s a realistic chance of moving, selling or making substantial extra repayments, the early-exit and portability wording could outweigh a modest rate difference. Portability also needs to be read carefully: find out what happens if the replacement property, loan size or timing does not fit the lender’s conditions.
 
A simple spreadsheet should settle most of it. For each lender list: starting balance, 5.73% or alternative rate, monthly repayment, fees paid upfront, fees added to the balance, total payments over 60 months, and balance after month 60. Then run separate scenarios for selling or refinancing earlier. Keep affordability as its own test rather than letting a lower five-year total justify an uncomfortable monthly payment.
 
One caveat to the spreadsheet approach: the five-year calculation can look precise while hiding the biggest uncertainty, which is the rate after the fixed term. I’d run at least a few reset-rate assumptions and see whether the payment is still manageable. Don’t build the decision around refinancing being cheap or available in year five; treat that as a possible option, not the base case.
 
Is the proposal to fix the entire borrowing for five years, or can part remain variable? That choice changes the value of extra-repayment flexibility and may matter more than a small headline-rate gap. I’d ask each lender to provide both structures using the same LTV and fees, if those structures are actually available.
 
Given the 109-day delay, I’d request refreshed written quotes on the same day and ask each lender to confirm the rate, LTV tier, all fees, monthly payment, early-repayment treatment and portability conditions. Then compare both the five-year cost and the remaining balance. That should expose whether 5.73% is genuinely expensive or simply looks higher because the advertisement assumed a different borrower profile.
 
You must log in or register to reply here.
Back
Top