Ann is looking for a fully amortizing $30$ year Fixed Rate Mortgage with monthly payments for

$$4,500,000.$

Mortgage A has a $4\mathrm{.}38\%$ interest rate and requires Ann to pay $1\mathrm{.}5$ points upfront.

Mortgage $B$ has a $6\%$ interest rate and requires Ann to pay zero fees upfront.

Assuming Ann makes payments for $30$ years, which mortgage has the lowest cost of borrowing

$($ie lowest annualized IRR$)?$ Type $1$ for A$,$ type $2$ for $B.$

$2$

Ann is looking for a fully amortizing $30$ year Fixed Rate Mortgage with monthly payments for

$$4,500,000.$

Mortgage A has a $4\mathrm{.}38\%$ interest rate and requires Ann to pay $1\mathrm{.}5$ points upfront.

Mortgage $B$ has a $6\%$ interest rate and requires Ann to pay zero fees upfront.

Assuming Ann makes payments for $2$ years before she sells the house and pays the bank the

balance, what is Ann's annualized IRR from mortgage $A?$

Ann is looking for a fully amortizing $30$ year Fixed Rate Mortgage with monthly payments for

$$4,500,000.$

Mortgage A has a $4\mathrm{.}38\%$ interest rate and requires Ann to pay $1\mathrm{.}5$ points upfront.

Mortgage $B$ has a $6\%$ interest rate and requires Ann to pay zero fees upfront.

Assuming Ann makes payments for $2$ years before she sells the house and pays the bank the

balance, what is Ann's annualized IRR from mortgage B$?$

Ann is looking for a fully amortizing $30$ year Fixed Rate Mortgage with monthly payments for

$$4,500,000.$

Mortgage A has a $4\mathrm{.}38\%$ interest rate and requires Ann to pay $1\mathrm{.}5$ points upfront.

Mortgage $B$ has a $6\%$ interest rate and requires Ann to pay zero fees upfront.

Assuming Ann makes payments for $2$ years before she sells the house and pays the bank the

balance, which mortgage has the lowest cost of borrowing $($ie lowest annualized IRR$)?$ Type $1$

for A$,$ type $2$ for B$.$

Ann obtains a $30$ year Interest Only Fixed Rate Mortgage with monthly payments for

$$4,500,000$ at $4\mathrm{.}38\%.$ What will Ann's monthly payments be$?$