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A $250,000 mortgage was originally financed at 8% annual interest over 30 years with monthly payments and compounding. After making your final payment in year
A $250,000 mortgage was originally financed at 8% annual interest over 30 years with monthly payments and compounding. After making your final payment in year 5, interest rates have fallen to 4% and you are considering refinancing.
What is your monthly mortgage payment under the initial loan?
What would be your new monthly mortgage payment after refinancing?
If the refinancing cost is 2% of the remaining balance on your loan, how much longer would you need to remain in your house before refinancing paid itself off?
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