Question 5 Consider a $5,000,000, 8.5%, 30-year mortgage with monthly payments. What is the yield to maturity (YTM) of this loan under the following circumstances: (a) No points, fully-amortizing (b) Three points of disbursement discount (point), fully amortizing (c) Three points of disbursement discount, 7-year maturity with balloon. Solution (a) YTM = contract interest rate with no points, fully amortizing. Therefore, YTM is 8.5% (b) 8.83%. (c) 9.10%