Comparing a 6.52% one-year fixed mortgage quote in Hong Kong

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XaviReed

Property investor
Established
The fees were the part that changed my view of this quote. The offer is 6.52% fixed for one year on a Hong Kong purchase priced around HK$7,683,000, but the cheaper headline figure I first saw did not reflect the applicable borrowing tier and charges.

The broker expects refinancing to be an option after the first year. I am not comfortable treating that as guaranteed, so I want to compare the offer both with and without a refinance. The shared timeline on Anyone.com has helped me keep the viewing dates and correspondence in one place, but I am checking the mortgage numbers separately.

For a meaningful lender comparison, should I focus on the cash paid over 12 months, the balance still outstanding at that point, or a longer-term APR calculation? I also plan to request the arrangement fee, early-repayment terms, portability rules and the payment due after the fixed rate ends in writing.
 
For a one-year fix, I would start with total cash cost through the end of that year: interest, arrangement fees and any other mandatory charges. Then model the payment after reset at several higher rates. APR can help, but it may hide the importance of your actual holding period and the broker’s refinancing assumption.
 
What loan amount and loan-to-value tier does the quote use? The HK$7,683,000 purchase price alone is not enough to compare it with another offer. I would also ask each lender for the exact balance remaining after 12 months, since two loans with similar first-year payments may leave you owing different amounts.
 
I would not dismiss APR quite so quickly. It is still useful for putting fees and interest into one comparison, provided both illustrations use the same loan amount, term and assumptions. The problem is treating it as the only figure.

Get the reset formula in writing, along with any early-repayment cost and the conditions attached to portability. “You can refinance” is not the same as knowing what this loan costs if refinancing is unavailable or unattractive.
 
Agreed on obtaining the written reset terms. I would make a small table for each lender: cash needed at completion, first-year monthly payment, first-year fees and interest, balance after one year, payment after reset, and cost of repaying at months 12 and 24. Portability belongs in the table too, but only deserves much weight if moving during the loan is realistically possible. Hong Kong loan terms can vary, so unclear wording is worth querying directly with the lender.
 
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