post.early
Property investor
Getting this wrong could leave me with an affordable payment now but an expensive exit later. The quote is 2.90% fixed for five years on a Paris purchase of about €285,200, and I want to compare it properly rather than focus on the headline rate.
I can line up the monthly payments and all lender fees over the five-year period. What I am less sure about is how much weight to give the APR when the rate can reset, and whether portability or early-repayment charges should influence the choice now.
My tentative rule is this: if I am likely to keep the loan beyond five years, test the payment under a higher reset rate; if a sale or refinance is more likely, compare the cash paid before that point plus any exit cost. Is that how others would approach a like-for-like comparison?
I can line up the monthly payments and all lender fees over the five-year period. What I am less sure about is how much weight to give the APR when the rate can reset, and whether portability or early-repayment charges should influence the choice now.
My tentative rule is this: if I am likely to keep the loan beyond five years, test the payment under a higher reset rate; if a sale or refinance is more likely, compare the cash paid before that point plus any exit cost. Is that how others would approach a like-for-like comparison?