You bought a house with price of $500,000. Your LTV (loan-to-value ratio) is 80%. You choose the 30-year mortgage with interest rate 5%. Assuming the total transaction cost is $15,000.
1.What is your monthly payment?
1,199.10
482.63
2,147.29
1,664.66
2.What will be the loan balance at the end of 10 years?
583,054.80
332,685.33
325,367.70
171,580.46
3.What is the effective borrowing cost if the loan will be prepaid at the end of 10 years?
6.79%
4.6%
46%
5.53%