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QUESTION
Consider that you need to finance the purchase of a house. The purchase of the house is $400,000 and you will require 100% financing.
Consider that you need to finance the purchase of a house. The purchase of the house is $400,000 and you will require 100% financing. The loan term is 30 years and the terms of the contract require monthly end of period payments (including interest and principle). The current variable rate offered by your bank is 7% per annum.
How much will your monthly payment increase if the interest rate is increased by 50 basis point 5 years after the mortgage start?
