Erwin and Eleni have an outstanding mortgage balance of $175,000. They have 14 months remaining on their mortgage at a fixed-rate of 4.5% compounded semi-annually on their five-year (60 month) mortgage term. The current five-year fixed rate of interest for a mortgage is 3.1%, compounded semi-annually. They would like to “blend and extend” their existing mortgage for another five-year term. What rate would they be charged under a blend-and-extend option?
Erwin and Eleni have an outstanding mortgage balance of $175,000. They have 14 months remaining on their mortgage at a fixed-rate of 4.5% compounded semi-annually on their five-year (60 month) mortgage term. The current five-year fixed rate of interest for a mortgage is 3.1%, compounded semi-annually. They would like to “blend and extend” their existing mortgage for another five-year term. What rate would they be charged under a blend-and-extend option?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Erwin and Eleni have an outstanding mortgage balance of $175,000. They have 14 months remaining on their mortgage at a fixed-rate of 4.5% compounded semi-annually on their five-year (60 month) mortgage term. The current five-year fixed rate of interest for a mortgage is 3.1%, compounded semi-annually. They would like to “blend and extend” their existing mortgage for another five-year term. What rate would they be charged under a blend-and-extend option?
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