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A bank is evaluating the interest rate level for granting a 30-year house mortgage. The real risk-free rate is 0.45%, inflation is expected to be
A bank is evaluating the interest rate level for granting a 30-year house mortgage. The real risk-free rate is 0.45%, inflation is expected to be 1.54% this year, and the maturity risk premium for total 30 years is 1.2%. The liquidity premium is 0.03%, and default risk premium and call risk premium are evaluated to be 0.95% and 0.13%. What is the interest rate on this 30-year house mortgage? Please round your answer to the fourth decimal. e.g. if your answer is 1.23%, you should input 0.0123
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