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A Borrower is purchasing a property for $2,500,00 and can choose between two possible loan alternatives. The first is a 75% loan for 25 years

A Borrower is purchasing a property for $2,500,00 and can choose between two possible loan alternatives. The first is a 75% loan for 25 years at 3.75% interest and 2 points and the second is a 90% loan for 25 years at 4.375% interest and 2 points. Assuming the loan will be repaid in 5 years, what is the incremental cost of borrowing the extra money.

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