You want to buy a house using mortgage Local lenders are offering the following terms for $30-$year, monthly amortizing fixed rate mortgages.

Contract Rate Closing Costs Prepayment penalty

If you hold the mortgage to maturity, which contract do you prefer?

Assume a holding period of five years and NO prepayment Which contract do you prefer now?

Assume a holding period of ten years and NO prepayment Which contract do you prefer now?

Assume that the pre$-$payment penalty is applied. Which contract do you prefer now, considering a $5$ year holding period?

Assume that the loan is held to maturity. Which contract do you prefer now?