Sydney serviced apartment: comparing a 7.30% one-year fixed mortgage quote

T

TheoCalder

Buyer
Established
The one-year fix is easy to quote but difficult to judge. My concern is what happens in month 13 if refinancing is unavailable or unattractive.

The purchase is a Sydney serviced apartment at about A$1,186,000, and the offer is 7.30% fixed for one year. Its LTV band and added charges make it noticeably dearer than the promoted rate. Should I rank offers by the cost over those first 12 months, while separately testing the later monthly payment at higher rates? I am also waiting for a proper breakdown of upfront versus financed fees and the conditions for early repayment or moving the loan.
 
For a one-year fix, I’d start with total cash cost over those 12 months: interest, mandatory fees and repayments. Then separately test the monthly payment after the fixed period at several higher rates. APR can be useful, but it may not reflect your likely holding period or refinancing plan particularly well.

How large is the gap between the advertised rate and your actual quote, and are the fees paid upfront or added to the loan?
 
The lender’s loan-to-value tier accounts for part of the gap; the rest is fees. I’m still waiting for a clear breakdown showing whether every fee is upfront or financed.

Your second point is probably what I was missing: I compared the fixed year but not the payment after reset. Would you also include a possible second set of fees for refinancing, even though that may not happen?
 
I disagree slightly with making the first-year cash cost the main comparison. It can make a short fix look attractive while pushing the uncertainty into month 13. Since you already distrust the refinance assumption, compare at least two paths: keeping this loan after reset and refinancing with another round of costs.

Also ask whether the serviced-apartment classification affects this particular quote or your later refinancing options. Don’t assume every lender will assess the property in the same way.
 
Yes, include possible refinancing fees as a separate scenario rather than pretending they are certain. I’d ask each lender or broker for the same dollar-based comparison: cash required at settlement, payments during the fixed year, balance after 12 months, cost of leaving then, and payments if the rate resets instead.

Get the portability and early-repayment wording explained against realistic examples too. If the deal only remains affordable when refinancing is easy and cheap, that is useful information before committing.
 
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