Question

A person purchased a ​$239,127 home 10 years ago by paying 15​% down and signing a​ 30-year mortgage at 10.8​% compounded monthly. Interest rates have dropped and the owner wants to refinance the unpaid balance by signing a new 20​-year mortgage at 6 % compounded monthly. How much interest will refinancing​ save?

Answer 1

monthly payment on first loan:

Calculator
Inputs:
FV	-
PV	203,257.95
Rate (I/Y) per period	0.900%
Term N payments	360
Output:
PMT	($1,905.02)

Loan balance after 10 years:

Calculator
Inputs:
PV	203,257.95
PMT	($1,905.02)
Rate (I/Y)	0.900%
Term N	120.00
Output:
FV	($183,343.40)

Loan balance is 183,343.40

New monthly payment and interest savings:

Calculator
Inputs:
FV	-
PV	183,343.40
Rate (I/Y) per period	0.500%
Term N payments	240
Output:
PMT	($1,313.53)

Interest savings:

Particulars	Amount
Total payments old loan	457248
Total payments new loan	315,247.20
Interest saved	142,000.80

Answer is;

140,000

please rate.