Calculate your monthly payments for next seven years

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Reference no: EM131016051

Five years ago you signed a loan contract with a repayment of 12 years at a fixed rate of 7.5%. You have made all your monthly payments so far and at present have a balance of $125000. The current market rate is 6.25% but you are obliged to continue paying your mortgage based on your contractual rate of 7.5%

1) Calculate your monthly payments for the next 7 years.

2) Suppose your lending officer offers you the new 6.25% rate if you pay an extra fee of $7500. Would you take that deal?

3) What is the maximum fee you would pay to switch to the new rate?

Reference no: EM131016051

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