Question: When purchasing a $310,000 house, a borrower is comparing two loan alternatives. The first loan is a 90% loan at 10.5% for 25 years. The

When purchasing a $310,000 house, a borrower is comparing two loan alternatives. The first loan is a 90% loan at 10.5% for 25 years. The second loan is an 85% loan for 9.75% over 15 years. Both have monthly payments. What is the incremental cost of borrowing the extra money if the first loan is paid off in 15 years at the same time as the second loan?

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