The inundation of the lower tubes in a tube bundle with condensate formed on the upper tubes is among the major causes of reduced condensation rate. Experimental methods can hardly be used to get detailed information on the inundation effect, since each factor that controls the condensation process should be considered individually. However, CFD modelling using direct interface-tracking methods is an effective tool for analyzing such processes. This paper reports the results of simulation of the saturated propane vapor condensation on the surface of a horizontal tube using the Volume of Fluid method with the modified Lee model. The study presents, for the first time, the characteristics of saturated vapor condensation including the effect of inundation predicted using a 3D model. The interphase surface and the distribution of instantaneous heat transfer coefficients over the surface of the inundated pipe are presented. It has been shown that increasing the temperature of the condensate flow can substantially affect the distribution of the heat transfer rate over the tube surface due to the formation of a thermal entrance region. These results may become a starting point for modelling condensation in a tube bundle that enjoys current interest in practice.