Question 1 - Basic Mortgage Calculations Landon has found his new home! The house is listed for $950,000 but there was a bidding war and he ended up paying $1,100,000. His financial institution pre-approved him for a 5 year fixed closed mortgage at a rate of 3.15% with monthly payments and a 25 year amortization. He estimates that the interest rate will increase to 4.25% when he has to renew in 5 years. Upon renewal at year 5 he will also switch to bi-weekly payments. He will have a conventional mortgage. a) Compute his monthly mortgage payment. b) Compute the balance outstanding after 5 years. c) Compute the new mortgage payment upon renewal after 5 years. |