Comparing a 2.83% three-year fixed mortgage quote in Mumbai

R

runsAndEmber

Homeowner
Established
The 2.83% rate is appealing, but I am concerned that the payment after the three-year fix could become uncomfortable. The purchase price is about ₹63,040,000, and the two Mumbai illustrations appear to use different fee and loan-to-value assumptions.

Should I first compare all payments and lender charges through month 36, together with the balance still outstanding, rather than rely on APR alone? I also want to test the monthly payment at a higher reset rate. Once the figures are run on the same loan amount and term, I can decide how much value to place on portability and early-repayment flexibility.
 
I would compare them over the same three-year period, since that is the only rate period you know. Add payments and all lender fees, then note the remaining loan balance after month 36. A lower cash outflow can be misleading if that illustration leaves you owing more at the end.
 
One missing fact: are both illustrations based on exactly the same loan amount, repayment term and repayment method? If the loan-to-value tiers differ, even a small change in the assumed deposit could put the quotes into different categories. I would ask each lender to rerun the figures using identical inputs.
 
That may explain more than I first thought. The property price is the same, but I need to confirm that both lenders used the same financed amount and term rather than focusing only on the headline 2.83%. I’ll request matching illustrations and a month-36 balance from each.
 
I wouldn’t rely on APR alone here. It can be useful, but it may incorporate assumptions extending beyond the 3-year fixed period, and you already know those assumptions differ. For your decision, I’d keep two views: the cost through year three and a separate estimate of what happens if you cannot refinance then.
 
There’s a caveat to treating three years as the whole comparison. If one loan has expensive early repayment or restrictive portability, its apparent saving could disappear if you sell or move before the fixed period ends. Ask for the actual fee schedule and the circumstances in which portability can be refused, not just whether the loan is described as portable.
 
Monthly affordability deserves its own line in the spreadsheet. Two offers can have similar three-year costs but different payment timing because of fees or other assumptions. Record the initial cash needed, normal monthly payment, any one-off charges, and the payment shown after the fixed period. That makes the stress points visible.
 
I partly disagree with dismissing APR. It is still a useful warning sign when a low advertised rate carries substantial fees. I just wouldn’t use it as the deciding number. If the comparison periods and post-fix assumptions are inconsistent, APR cannot resolve that inconsistency for you.
 
Also ask whether the arrangement fee must be paid upfront or can be added to the loan. Adding it may help short-term cash flow, but then it affects the balance and interest calculation. The written illustration should make that visible; otherwise your three-year cash-cost table may omit part of the effect.
 
For rate-reset risk, try three simple scenarios after year three: the same rate, a moderately higher rate, and a level that would strain your monthly budget. You do not need to predict the future accurately. The point is to see whether the purchase remains manageable if refinancing is delayed or unattractive.
 
Once you have matching inputs, I’d decide from four figures: upfront cash, total payments through month 36, balance at month 36, and the payment under a higher-rate scenario. Then compare early-repayment and portability wording separately. That should expose whether 2.83% is genuinely the better offer or merely the better headline.
 
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