Loan amount = Present value of future monthly payments = monthly payment * [1-(1+i)^-n]/i
i = interest rate per period
n = number of periods
=>
at 5% interest
monthly payment * [1 - (1+0.05/12)^-360]/(0.05/12) = 186000 * (1-0.25)
=>
monthly payment = 748.87
total interest = 748.87*360 - 186000*(1-0.25) = 130093.2
at 3.5% interest
monthly payment * [1 - (1+0.035/12)^-360]/(0.035/12) = 186000 * (1-0.25)
=>
monthly payment = 626.42
total interest = 626.42*360 - 186000*(1-0.25) = 86011.2
excess interest = 130093.2- 86011.2
= 44082
Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes...
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