Suppose a home buyer is faced with two options to finance his $292,000 home purchase. Option 1 is a 75% LTV loan at 3.75% for 15 years with monthly payments. Option 2 is a 90% LTV loan at 5.25% for 30 years with monthly payments. The lender quotes 3 discount points with Option 1 and 2 discount points with Option 2. The lender also quotes a 1% origination fee for both loans. Finally, the lender quotes a 4% prepayment penalty for both loans. Assuming the buyer intends to sell the home and repay the loan after 12 years, what is the incremental borrowing cost of the extra financing obtained if Option 2 is selected?