Comparing a 7.54% 20-year fixed quote on a $1.385m New York purchase

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I want to choose the loan that is cheapest over the period I am likely to keep it. The obstacle is that the headline rates do not seem directly comparable.

For a New York purchase of about $1,385,000, I have a quote at 7.54% fixed for 20 years. Upfront lender charges and the applicable loan-to-value band make it less attractive than the advertised figure suggested.

Should I compare APR first and then calculate total cash paid over a realistic holding period, including points and other lender fees? I also need a sensible way to value early-payoff conditions, portability and the risk that I move or refinance well before 20 years.
 
Use more than one figure. Compare APR only where the loan amount, term, rate-lock assumptions and points are equivalent, then calculate the cash cost over the period you realistically expect to hold the loan. A cheaper headline rate can lose once upfront fees are included, while a higher-fee option may only make sense after a long break-even period.
 
What down payment and loan amount produced the 7.54% quote? The purchase price alone doesn’t reveal the loan-to-value tier. I’d also ask each lender to separate points, lender fees and other closing costs. Otherwise you may be comparing a rate bought down with upfront cash against one that includes no points.
 
I wouldn’t use total interest over 20 years as the main comparison unless you are confident you will never sell, repay early or refinance. Run the costs at several possible holding periods instead. Also compare the actual monthly payment against your comfort level; a theoretically cheaper long-term loan is not attractive if it leaves too little monthly flexibility.
 
There is another ambiguity here: is this a fully amortizing 20-year fixed loan, or a rate fixed for 20 years with some later reset or remaining balance? The wording matters. I also wouldn’t dismiss portability as irrelevant, although US mortgage terms vary and the contract controls. If moving is plausible, ask exactly whether the loan can transfer and under what conditions rather than relying on the label.
 
A simple worksheet should make the trade-off clearer. For each quote, list loan amount, 7.54% or alternative rate, points, lender fees, monthly principal and interest, and estimated cash cost after 3, 5, 10 and 20 years. Add any early-repayment charge shown in the terms, but don’t assume refinancing will happen or that future rates will be lower. Then ask lenders for matching versions with and without points so the break-even comparison is visible.
 
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