You just took a fixed-rate mortgage for $240,000 at 4.75% for 30 years, monthly payments, two discount

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You just took a fixed-rate mortgage for $240,000 at 4.75% for 30 years, monthly payments, two discount points. Before you make any payments you receive a nice raise so you plan to pay an extra $200 per month on top of your normal payment.

A. What is your net interest savings over the life of the loan, assuming the loan is held to its maturity?

B. If you make this higher payment and hold the loan for its full life,

what is the effective cost of the loan?

Related Book For answer-question

Financial Modeling

ISBN: 978-0262024822

4th edition

Authors: Simon Benninga

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Posted Date: Sep 06, 2020 03:48 AM

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You just took a fixed-rate mortgage for $240,000 at 4.75% for 30 years, monthly payments, two discount

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A REPAYMENT SCHEDULE NORMAL All fig in Month Opening Balance Interest 475 Principal Repayment Total EMI Balance 1 24000000 95000 30200 125200 23969800 2 23969800 94880 30320 125200 23939480 3 23939480 ... View the full answer

Financial Modeling

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