Fixed-rate mortgage to buy new home

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Reference no: EM131444344

You need a 25-year, fixed-rate mortgage to buy a new home for $270,000. Your mortgage bank will lend you the money at an APR of 5.65 percent for this 300-month loan. However, you can afford monthly payments of only $1,100, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment.

How large will this balloon payment have to be for you to keep your monthly payments at $1,100?

Reference no: EM131444344

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