New York small multifamily: comparing a 3.39% one-year fix on an $810,000 purchase

[frame.grand]

I’m comparing financing for a New York small multifamily purchase around $810,000. One quote is 3.39% fixed for 1 year. Its arrangement fee is painful, but the overpayment terms are much better than the alternatives. The advertised rate was lower; the actual quote changed because of the loan-to-value tier and fees.

What should drive the comparison: APR, interest paid during the fixed year, or total cash cost including fees? I’m also looking at portability and early-repayment terms, because I don’t want the calculation to assume an easy refinance after year one.

 

[sol.north]

For a one-year fixed period, I’d compare total cash paid through the date the rate resets: interest, lender fees and any other charges that differ between quotes. APR is useful, but its assumptions may not match a loan you expect to refinance or change after one year. Then run a second scenario where refinancing is delayed and the reset rate applies.

 

[reviewTheGate]

What happens after the first year? The missing details are the reset formula and whether the painful fee is paid in cash or added to the balance. Also compare every quote at the same loan amount and loan-to-value. Otherwise a lower rate can appear cheaper simply because you are bringing more cash to closing.

 

[weighTheRoute]

I wouldn’t dismiss APR quite so quickly. It gives you a standardized starting point and can expose an attractive headline rate supported by heavy fees. The mistake is treating it as the final answer. With such a short fixed period, I’d use APR alongside a one-year cash-cost calculation and the projected monthly payment after reset.

 

[compass.keen]

Be cautious about assigning much value to portability until the lender confirms exactly when it applies and whether a new property, underwriting decision or loan-to-value could change the outcome. The same goes for “better overpayment terms”: estimate how much you realistically expect to repay during that first year, then calculate whether the fee is actually recovered.

 

[frame.grand]

That helps. I was giving the 3.39% too much weight and not separating the first-year cost from the refinance assumption. I’ll put the quotes into the same comparison using identical principal and loan-to-value, with fees shown both upfront and, where applicable, added to the balance. I’ll also ask each lender for the post-year-one payment terms in writing before valuing portability or overpayment flexibility.

 

[avery_keys]

Add one affordability test that assumes no refinance at the end of year one. You do not need to predict the exact future rate; test a few higher monthly payments and decide where the property stops being comfortable to carry. A quote can win on first-year cash cost yet still be the wrong choice if its reset structure creates too much risk.