Question

Am I correct?

Answer 1

1. Ken and Kim have obtained a 30-year, fixed rate mortgage for $625,250 with a 7.05% interest rate. They purchased 3 points and their rate is now 6.775%. Factoring in the cost of points, when is the break-even point on their mortgage? 4 years, 6 months 13 years, 7 months 12 years, 6 months 6 years, 0 months I got 13.58 which I am guessing is 13 years and 7 months


1. Monthly payment so 7.05 = 418.82 Monthly Payment of 6.775 = 4065.80 Subtract those 2 and I got 115.02



1. Cost of points = 625,250* 0.03=18757.50 18757.50/163.08 = 163.08 163.08/12 = 13.59