Comparing a 6% two-year mortgage quote for a Berlin purchase

T

theo_vale

Buyer
A new mortgage quote has made the comparison less straightforward. After 108 days in the purchase process, I have been offered 6.00% fixed for 2 years on a Berlin property costing around €634,800, but the fees and the lender’s loan-to-value band make the initial headline figure a poor guide.

I can compare APRs, yet for such a short fixed period I am wondering whether the more useful measure is unavoidable cash outlay through month 24, with principal repayment and the remaining balance shown separately. The payment must also work comfortably each month. How would you account for portability and early-repayment conditions without giving them more weight than a move or early sale realistically deserves?
 
For a two-year fix, I’d compare total unavoidable cost through month 24, while showing principal repayment separately because that reduces the debt rather than disappearing as a cost. Use the same loan amount and repayment schedule for every quote.

Is the 6.00% the borrowing rate or the APR after fees? Also, are all lenders placing you in the same loan-to-value tier?
 
One extra calculation: compare the outstanding balance at the end of the fixed period. Two offers can require similar monthly payments but leave different balances after two years. I’d put interest, arrangement fees, any early-exit cost and the month-24 balance on one sheet. Portability matters only if its conditions fit the move you might realistically make.
 
I wouldn’t let the two-year cash total decide this on its own. With such a short fixed period, the refinance assumption may dominate the result. Model at least a manageable reset and a painful reset, then see whether the payment still fits.

Could a slightly larger deposit move the loan into a better loan-to-value tier, or is the current deposit already fixed? That may matter more than trimming a fee.
 
That’s fair, although future rates are unknowable, so I’d keep the lender comparison separate from the stress test. First identify the cheapest offer on identical assumptions; then test whether the remaining balance is affordable at higher refinance rates.

Given the 108-day timeline, I’d also ask how long this quote remains valid and whether any property or borrower reassessment could change the rate before completion.
 
My practical next step would be to request the same short table from each lender: loan amount, monthly payment, total interest for 24 months, all mandatory fees, balance after month 24, early-repayment terms and precise portability conditions. Then run the refinance scenarios separately. If 6.00% only looks competitive under an optimistic rate reset, that is useful warning information even if its APR is attractive.
 
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