Bill is looking for a fully amortizing 30-year Fixed-Rate Mortgage with monthly payments for $1,250,000.

Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront.

Mortgage B does not require paying any fees upfront.

Assuming Bill plans to make payments for 2 years and then immediately pay the remaining balance, what should be the interest rate on mortgage B to make Bill indifferent between these two mortgages? Hint: Bill wants the mortgage with the lowest IRR, so she is indifferent if IRRs are the same.

will rate thank you