You plan to purchase a house for $ 400,000 and you will make a 20% down payment.

You are evaluating two mortgages a 30-year fixed mortgage at 3.34 %, and a 15-year

fixed mortgage at 2.45%.

Your goal is to have a monthly payment that fits within your

budget.

a.

Which mortgage will give you the lowest monthly payment?

What will that

payment be?

How much less will this be than the other monthly mortgage

payment?

b.

Assuming you take the full term of the mortgage, which mortgage will result in

you paying the most interest?

What will that interest be?