Ann is looking for a fully amortizing 30-year Fixed Rate Mortgage with monthly payments for $1,500,000. Mortgage A has a 7.05% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 9% interest rate and requires Ann to pay zero fees upfront.

1. Assuming Ann makes payments for 30 years, what is Anns annualized IRR from mortgage A?
2. Assuming Ann makes payments for 30 years, what is Anns annualized IRR from mortgage B?
3. Assuming Ann makes payments for 30 years, which mortgage has the lowest cost of borrowing (ie lowest annualized IRR)? Type 1 for A, type 2 for B