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Smith is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $450,000. Mortgage A has a 4.25% interest rate and
Smith is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $450,000. Mortgage A has a 4.25% interest rate and requires Smith to pay 1.5 points upfront. Mortgage B has a 5% interest rate and requires Smith to pay zero fees upfront. Assuming Smith makes payments for 2 years before she sells the house and pays the bank the balance, what is Smiths Annualized IRR from mortgage A?
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