Comparing a 6.09% 30-year fixed mortgage quote in Tokyo

E

EarlyGlass

Buyer
Established
I received a 6.09% quote for a 30-year fixed mortgage on a Tokyo property purchase around ¥82,620,000. The advertised rate initially looked lower, but the arrangement fee and loan-to-value tier made the actual offer less attractive. Another quote has a painful fee but much better overpayment terms.

What should I use for a fair comparison: APR, interest over 30 years, or total cash cost including fees? I’m also looking at portability, early repayment and monthly affordability rather than assuming I can simply refinance later.
 
I would compare total cash cost over both the full 30 years and the period you realistically expect to keep the loan. Include upfront fees, monthly payments, any financed fees, early-repayment costs and the balance still outstanding at the end of each comparison period. APR is useful for initial sorting, but it can conceal why one offer suits your plans better.
 
Is ¥82,620,000 the purchase price or the amount being borrowed? That distinction, plus your deposit, would explain the loan-to-value tier and materially change the monthly figure. Also, is the arrangement fee paid in cash or added to the loan? If it is financed, you would be paying interest on it too.
 
You have already identified the fees and different comparison periods; what remains unclear is whether the assumed refinance or sale date is realistic. A large upfront fee can look economical over a chosen short period while leaving you exposed if refinancing is unavailable or unattractive at that point.

Use the full 30-year, no-refinance case as the control. If an earlier exit is reasonably likely, compare the remaining balance and all exit costs at that date as a second case; if it is only a hope, do not let it justify the more restrictive offer. I’d also test the monthly payment after allowing for higher ownership costs, because a cheaper loan on paper is little help if the overall budget becomes tight.
 
Agreed on using more than one horizon, although I wouldn’t automatically favour the lowest full-term cost if Luis values flexible overpayments. A lender’s illustration should let you separate interest, principal and fees. For portability, ask exactly what happens if the next property, loan amount or loan-to-value differs; the word itself is not enough to establish that the mortgage can move on unchanged terms.
 
Put the offers into one table with identical loan amount and term: cash needed at completion, monthly payment, arrangement fee, permitted overpayments, early-repayment cost, remaining balance after several plausible exit dates, and total paid by each date. Then run a second version with no refinance at all. That should expose whether the lower advertised rate genuinely compensates for its fees and restrictions.
 
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