Five years ago you took out a 30-year mortgage with an APR of 6.5% for $200,000. If you were to refinance the mortgage today for 20 years at an APR of 4.25%, how much would your monthly payment change by?

Question

Quizplus · Accepted Answer

B) Current Mortgage Payment: P/Y = 12, N = 360, I/Y = 6.5, PV = $200,000, Solve for PMT = $1,264.14
Current Mortgage Balance: P/Y = 12, N = 300, I/Y = 6.5, PMT = $1,264.14, Solve for PV = $187,221.9
New Mortgage Payment: P/Y = 12, N = 240, I/Y = 4.25, PV = $187,222.54, Solve for PMT = $1,159.35
Current Payment - New Payment = $1,159.35- $1,264.14 = -$104.79

Five Years Ago You Took Out a 30-Year Mortgage with an APR