Now that she has accumulated a deposit of $100,000, Julie wishes to use this deposit and take out a housing loan to purchase a home. The home costs $600,000. The loan is to be repaid in equal monthly instalments over a term of 25 years.Julie recalls that the interest rate quoted by the bank is an annual nominal rate of 3.6%pa compounded monthly.After 5 years (60th repayment just about to be made), the bank announces the interest rate will change to an annual nominal rate of 2.8%pa compounded monthly.

Question: Do I need to determine the annual EFFECTIVE rate before working out monthly repayments etc?

Thanks