Tom got a 30-year fully amortizing FRM for $1,500,000 at 6% with constant monthly payments. After 3 years of payments, rates fall and he can get a 27-year FRM at 5%, but he must pay two points and $1,

Tom got a 30-year fully amortizing FRM for $1,500,000 at 6% with constant monthly payments. After 3 years of payments, rates fall and he can get a 27-year FRM at 5%, but he must pay two points and $1,000 in closing costs to get the new loan. Think of the refinancing decision as an investment for Tom, he pays a fee now but saves money in the future in the form of lower payments. Was the annualized IRR of refinancing for Tom assuming he pays through maturity.