What is the effective borrowing cost

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You bought a house with price of $250,000. Your LTV (loan-to-value ratio) is 80%. You choose the 30-year mortgage with interest rate 6%. Assuming the total transaction cost is $10,000.

What is the effective borrowing cost if the loan will be prepaid at the end of nine years? Show the calculations in Excel.

Reference no: EM132515968

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