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Claire has a 30 year fixed rate mortgage with a nominal interest rate of 4% per year compunded monthly. The initial principal is $300,000. Immediately
Claire has a 30 year fixed rate mortgage with a nominal interest rate of 4% per year compunded monthly. The initial principal is $300,000. Immediately after the 144th payment (at the end of the 12th year), she considers refinancing the loan, that is, she considers taking out a new mortgage to pay off what is still owed on the current mortgage. Her new loan would be a 20 year fixed rate mortgage with a nominal interest rate of 3.5% per year compunded monthly. What is the total interest she would pay over the 32 years if she did refinance ?
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