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Pay off the mortgage after refinancing

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Reference no: EM133305862

You purchased your house 5 years ago with the help of a mortgage. The mortgage requires monthly payments of $1,450, had an original term of 30 years, and had an interest rate of 8% (APR, compounded monthly). Over the last five years, interest rates have fallen and so now you want to refinance that is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a 30-year term, requires monthly payments, and has an interest rate of 6.625% (APR, compounded monthly).

1. What monthly repayments will be required with the new loan?

2. If you still want to pay off the mortgage in 25 years, what monthly payment should you make after you refinance?

3. Suppose you are willing to continue making monthly payments of $1,450. How long will it take you to pay off the mortgage after refinancing?

Reference no: EM133305862

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