FreddieMac reports that the average rate on a 30-year fixed rate mortgage is 3.92% as of January 2012. This is down from 4.76% in January 2011 and 5.03% in January 2010. If you have a $230,000, 5%, 30-year mortgage, how much interest will you save if you refinance your loan at 3.5% for 15 years?
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FreddieMac reports that the average rate on a 30-year fixed rate mortgage is 3.92% as of January 2012. This is down from 4.76% in January 2011 and 5.03% in January 2010. If you have a $230,000, 5%, 30-year mortgage, how much interest will you save if you refinance your loan at 3.5% for 15 years?
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- Use Excel to solve this problem.An $11,000 mortgage has a 30-year term and a 6% nominal interest rate.(a) What is the monthly payment?(b) After the first year of payments, what is the outstanding balance?(c) How much interest is paid in Month 13? How much principal?Consider a 15 year, fixed rate mortgage for $150,000 at a nominal rate of 8%. The loan comes with a facility to pay end of year installments. What is the duration of the loan? If interest rates increase to 8.25% immediately after the mortgage is made, how much is the loan worth to the lender?← You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is 6.3%. You chose a 20-year amortization and you decide to make 12 payments per year. Each mortgage payment is $2,551.90. How much interest do you pay in the first year? Express your answer as a percentage of the total value of your mortgage payments in the first year. The interest as a percentage of the total payments in year 1 is %. (Round to four decimal places as needed.)
- Suppose you have a $175,000 30-year mortgage with a 4.5% interest rate on the loan. c. If you pay $975 per month on your mortgage instead, in how many years will you pay off the loan?If you want a 20-year, fixed mortgage loan of $500,000, with an annual interest rate of 3.25% APR and no down payment. 1) Determine the monthly mortgage payment, determine the total amount paid over the full term of the loan, and how much interest will be paid on the loan over the 20 years. 2) Of the first month's mortgage payment, how much goes towards the interest and how much is applied to the principal? 3) What is the new balance on the 20-year loan after the first mortgage payment?If you could pay for your mortgage forever, how much would you have to pay per month for a $1,000,000 mortgage, at a 6.5% annual interest rate? Work out the answer (a) if the 6.5% is a bank APR quote and (b) if the 6.5% is a true effective annual rate of return.
- You can afford to pay $750 per month for mortgage payments. How large a loan can you afford if the interest rate is 4.25% for a 30-year fixed mortgage?Suppose you obtain a mortgage loan of $210,000 at an annual interest rate of 5.0%. How much less is the interest paid over the life of a 10-year loan than over the life of a 25-year loan? Round your answer to the nearest cent.Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year loan is quoted with an interest rate of 8.0% and you borrow $1,000, then you pay back $1,080. But you make these payments in monthly instalments of $108 each.a) What is the true APR on this loan?b) What is the effective annual rate on the loan?
- Suppose that the mortgage loan described in question 10 is a one-year adjustable rate mortgage (ARM), which means that the 10.5% interest applies for only the first year.If the interest rate goes up to 12% in the second year of the loan, what will your new monthly payment be?You need a loan of 250000 to buy your first home. The bank offers a 30 year fixed-rate mortgage with an APR of 4.16% or a 15 year fixed-rate mortgage with an APR of 3.22%.What will your monthly payments be for the 30-year mortgage? How much will the total interest be for the 30-year mortgage? What will your monthly payments be for the 15-year mortgage? How much will the total interest be for the 15-year mortgage?4. If you borrow $200,000 at an APR of 8% for 25 years, you will pay more per month than borrow the money for 30 years at 8%. a. What is the monthly payment on the 25-year mortgage, to the nearest cent? b. What is the total interest paid on the 25-year mortgage? c. What is the monthly payment on the 30-year mortgage? d. What is the total interest paid on the 30-year mortgage? e. How much more interest is paid on the 30-year loan? Round to the nearest dollar. f. What is the difference between the monthly payments of the two different loans? Round to the nearest dollar.