Continuing with the above situation, after 5 years (Pmt Nr 60), interest rates drop and you are offered a free refi nancing of the loan at 5.00%. You ’ d like to pull some cash out for other purposes and you ’ re “ used to ” paying $2,577.66 each month. Your new mortgage period is again 20 years, but now it ’ s 20 years from the start of your new mortgage. How much is the new mortgage for and how much cash do you pull out?

Fixed interest, fi xed payment mortgage loans are no different from the basic loans described in Chapter 3 . The problems below will, therefore, concentrate on variations in calculation brought about by different types of mortgage loans. Solving these problems, on the other hand, will require a working ability to solve the simpler problems.