You want to buy a house for $700,000 with $140,000 down payment. You take three mortgages to cover the $560,000 needed to buy the house. They are:

Loan 1: Loan for $250,000, fully amortizing 30-year fixed rate mortgage for 4.8%

Loan 2: Loan for $210,000, fully amortizing 30-year, 3-year ARM with reset every 3 three years. Initial rate is 3.6%.

Rate set at 2% margin over prime. No caps or floors.

The prime rate is expected to be: 4.6% at the end of year 3; 5.2% at the end of year 6 and stays same till the end of the loan

Loan 3: Loan for $100,000, interest only loan for 30 years, at fixed rate of 8%.

1. What is the effective interest for all the three loans combined, assuming you keep the house for 30 years?
2. What is the effective interest for all the three loans combined, assuming you keep the house for 10 years? In doing this assume there is no prepayment penalty on the outstanding balance for each of the three loans.