Today, Malorie takes out a 10-year loan of $200,000, with a fixed interest rate of 3.6% per annum compounding monthly for the first 3 years. Afterwards, the loan will revert to the market interest rate.

Malorie will make monthly repayments over the next 10 years, the first of which is exactly one month from today. The bank calculates her current monthly repayments assuming the fixed interest rate of 3.6% will stay the same over the coming 10 years.