Interview taken place on 30 June 2020

Johnny: Well the house cost $950,000. We have had to borrow $600,000. Our bank manager who is a golfing buddy of my dads suggested that we split the loan into two. So we have a $400,000 fixed rate loan. The rate is 3.93% fixed for the first five years. The loan itself is a 20-year loan. Repayments are fortnightly.

FP: What about the other $200,000 did you borrow that a variable rate?

Amber: Yes. It is a variable rate, 20-year loan with fortnightly repayments. The advertised rate was 3.85% however I just got an email saying that the comparison rate is 4.27%. Im confused is the rate 3.85% or is it 4.27%? Should we increase the amount of the fixed rate loan so as to reduce our exposure to interest rate variations?

Question:

Part 4: What is amount owing on mortgage after 5 years
Insert the total amount owing on the fixed rate home loan on 30 June 2025 into cell J4
Insert the total amount owing on the variable rate home loan on 30 June 2025 into cell J5
Show calculations below