Question

A borrower made a mortgage loan 7 years ago for $160,000 at 10.25% interest for 30 years. The loan balance is now $151,806.62 and rates for this amount are currently 9.0% for 23 years. Origination fees and closing costs are $4,500 and closing costs are not financed by the lender. What is the effective cost of refinancing

Answer 1

9.39%

Step-by-step explanation:

Base on the scenario been described in the question, the effective cost of refinancing is 9.39%