You are working for a bank that is issuing 30-year mortgages. To meet your cost of capital, you need to price these mortgages using an interest rate (stated as an effective annual rate) of 9%.

What is the most you can lend to a borrower who can only afford to pay $2,000 per month? (The first payment is made one period after the mortgage is issued, the standard assumption.)

Your bank manager wants to create a loan program where borrowers can defer making their first monthly payment for 2 years. The borrower will still make monthly payments over 30 total years, but the first payment will be made 2-years (aka 24-months) after the loan is issued. (The last payment made 32 years after the loan is issued.) Interest will accrue during the first 2 years.

Assume borrower in part 1 can afford 2,150 per month and the maximum loan amount under the conditions of part 1 is 275,824. (Note that this is not necessarily the same answer as part 1.)

What is the maximum loan size under this new scheme? (no decimals)