Comparing a 6.87% three-year fixed mortgage quote in New York

[wren_tools]

APR gives me one comparison, while the cash cost through year three gives me another, and neither feels sufficient on its own. The quote is 6.87% fixed for three years on a New York purchase of roughly $1,195,000. A lower advertised rate did not survive the fees and loan-to-value pricing, and the two lender illustrations do not appear to use identical assumptions.

I’m leaning toward comparing the same loan amount over 36 months: upfront costs, payments made and balance remaining. I would then check early-repayment conditions, portability and the payment terms after the fixed period separately. Is that a fair method, or is there another figure I should ask both lenders to produce before choosing?

 

[pia.brooks]

For this decision I’d compare total cost through month 36, including upfront fees, monthly payments and the remaining loan balance. APR is a useful first filter, but it can obscure the period you actually expect to keep the loan. Are both quotes based on exactly the same loan amount, and are any fees being added to the balance rather than paid at closing?

 

[radar.round]

The missing detail is what happens after the three-year period. Does the rate reset, and if so, what assumptions are each lender using for the later payments? Also, how much are you putting down? A small difference in loan-to-value could explain why the advertised offer is not the one you received.

 

[wren_lending]

I wouldn’t focus only on the cheapest 36-month projection. Refinancing after three years is an assumption, not an outcome, so the payment under a plausible reset matters for affordability. I’d also give portability little value until the lender explains in writing exactly when it applies and whether a new property or loan-to-value calculation could change the terms.

 

[hana.slate]

Ask both lenders to rerun their illustrations using identical purchase price, loan amount, fee treatment and three-year comparison date. Then put four figures side by side: cash due at closing, total payments over 36 months, balance remaining after 36 months, and any cost of repaying at that point. That should expose whether the lower-looking rate is actually better. Keep a separate stress-test row for the post-fix monthly payment rather than building the comparison around a guaranteed refinance.