Suppose you are planning for a 25-year mortgage to buy a residential property in Auckland....
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Suppose you are planning for a 25-year mortgage to buy a residential property in Auckland. The property value is $1,000,000. You have got a pre-approval for 85% of the property value. The interest rate on the mortgage is 2.49% for the mortgage period. Mortgage payments are to be made annually at the end of each year.
a. Calculate the annual mortgage payment on the loan (2 marks)
b. Construct a mortgage amortisation table showing the loan balance at the beginning of each period, annual repayment amount, interest payment, the amortisation of the loan and the loan balance each year. (15 marks)
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