I need help to calculate the ECB here…
1. You have cash on hand
Property value $400,000
Down Payment is $120,000 (i.e. LVR is 70%)
Loan #1 = $200,000
Loan #2 = $80,000
Interest rate (nominal) for Loan #1 is 8.40% per annum compounded semi-annually/
Interest rate for Loan #2 is 9% per annum compounded semi-annually.
Processing fees is $2,500
No cancellation penalty
Martgage payments paid annually
Term of the loan is 12 years
WHAT is the Effective Cost of Borrowing (ECB)?
2. You have cash on hand
Property value $800,000
LVR is 70%
Interest rate (nominal) is 8.75% per annum compounded semi-annually.
Processing fees is $28,000
Cancellation penalty is 2.50% of outstanding Mortgage Balance
Martgage payments paid annually
Term of the loan is 12 years
WHAT is the Effective Cost of Borrowing (ECB), IF you stayed 5 years?
Read more: The Effective Cost of Borrowing?
