In order to invest in a small inn in Val Mstair (CH, GR), an investor contracts a CHF 5.6M ARM with 30-year monthly payments and annual interest rate adjustments.

The teaser rate (1st year only) is 2%. Annual cap is 3%, and lifetime cap is 5.8%. The index for the loan is the LIBOR, and the loan has a margin of 180 basis points.

It is expected that the LIBOR will increase by 1.8% on the second year (at the end of Year-1), and by another 1.2% on the third year (at the end of Year-2).

Current Yield on Libor is 3.15%. The loan is prepaid in 3 years.

Assume the initiatial costs of 1.5 point (for loan issuance), and there is a 2.5% prepayment penalty.
PV after borrowing cost adjustments
3rd year Balance after pre-payment penalty adjustment
EBC (assuming pre-payment after 3 years)
You can use the space provided below for your calculations

In order to invest in a small inn in Val Mstair (CH, GR), an invester contracta a CHF 6.6M ARM with 30-year monthly payments and annual interest rate adjustment The me rate (1 year only in 23. Annual cap la 386, and lifetime cap la 5.8%. The index for the loan in the LIBOR, and the loan has a margin af 180 basis points It is expected that the LIBOR will increase by 18% on the second year (at the end of Year 1) and by another 1.2% en the third year (at the end of Your 2) Current Yield on Libor is 3.15. The loan is prepaid in 3 years BEG INDEX MARGIN RATE CONTRACT RATE ARM Annual Schedule Year 1 2 3 NPER PMT Asume the initial conta of 1.8 point for loan luance, and there is a priment penalty Wat berwindumenta Tird year Balance aux propayom penalty item AC Mine repayment for a yeam) You can come the pace provided below tw your callation TI PTA PM PSET PATA PMTO MTY VMT ME PM 1 In order to invest in a small inn in Val Mstair (CH, GR), an invester contracta a CHF 6.6M ARM with 30-year monthly payments and annual interest rate adjustment The me rate (1 year only in 23. Annual cap la 386, and lifetime cap la 5.8%. The index for the loan in the LIBOR, and the loan has a margin af 180 basis points It is expected that the LIBOR will increase by 18% on the second year (at the end of Year 1) and by another 1.2% en the third year (at the end of Your 2) Current Yield on Libor is 3.15. The loan is prepaid in 3 years BEG INDEX MARGIN RATE CONTRACT RATE ARM Annual Schedule Year 1 2 3 NPER PMT Asume the initial conta of 1.8 point for loan luance, and there is a priment penalty Wat berwindumenta Tird year Balance aux propayom penalty item AC Mine repayment for a yeam) You can come the pace provided below tw your callation TI PTA PM PSET PATA PMTO MTY VMT ME PM 1