Comparing a 5.42% fixed mortgage quote in São Paulo

The monthly payment is manageable, but I cannot yet tell which quote is cheaper for the period I am likely to keep it. The purchase is in São Paulo at about R$7,504,000, and one offer is 5.42% with a 15-year fixed period.

Once the arrangement charge and loan-to-value band were applied, the lender with the lower advertised figure no longer looked clearly better. I am comparing the cash paid over several possible holding periods, including a sale or refinance before year 15, rather than assuming the mortgage stays in place throughout.

How would you account for fees when comparing these offers: charge them upfront, spread them across the expected holding period, or include financed fees in the repayment schedule? Portability and early-exit conditions also matter because those choices may be difficult or expensive to change later.

I would compare total cash paid over the period you realistically expect to hold the mortgage. Use the same loan amount, deposit and repayment date for every lender, then include upfront and financed fees. A 15-year total is informative, but it can favour a low rate even if you are likely to refinance or sell much earlier.

Is the 15 years both the full mortgage term and the fixed period, or does the loan continue afterward at a reset rate? Also, is 5.42% the nominal rate or an effective figure that includes charges? Those details could change the comparison more than the headline difference between lenders.

One more thing: separate fees paid in cash from fees added to the balance. The latter affect both the amount borrowed and later interest. I’d ask each lender for an itemised payment schedule, then compare the balance remaining after perhaps five and ten years as well as the monthly instalment.

I wouldn’t dismiss APR as merely a headline comparison. It is a useful first filter if all offers are calculated on a genuinely comparable basis. The caveat is that you still need to confirm which fees and assumptions are included. Total cash cost is better for your personal decision, while APR helps identify which quotes deserve closer examination.

Be careful with the portability assumption. Confirm whether the term means moving the debt to another lender, transferring anything when you move property, or something else in that particular offer. I would also get the early-repayment calculation clearly stated. A cheaper refinance later may not remain cheaper once exit costs and a new set of fees are included.

A simple spreadsheet should settle most of this: upfront cash, monthly payments, all fees, remaining balance at several possible exit dates, and any early-repayment cost. Run one case where you keep the loan for all 15 years and another where you refinance earlier. If the rate can reset after year 15, stress that separately rather than blending it into the fixed-period comparison.