You want to buy a property in the city of Vancouver and the purchase price is $700,000. You will be making a down payment of 20% of the purchase price, and you will be taking a mortgage for the rest of the amount. For the mortgage, your bank quoted you an interest rate, APR semi-annual compounding with 25-year amortization. And you have converted the rate to APR monthly compounding of 5.2% APR monthly compounding.

(a) What would be the monthly mortgage payment for the above purchase?

(b) Your friend said I would always get a mortgage with the lowest interest rate. With that, I am getting the best deal. Do you agree? Why or why not?