A $250,000 mortgage was originally financed at 8% annual interest over 30 years with monthly payments...

A $250,000 mortgage was originally financed at 8% annual interest over 30 years with monthly payments and compounding. After making your final payment in year 5, interest rates have fallen to 4% and you are considering refinancing.

What is your monthly mortgage payment under the initial loan?

What would be your new monthly mortgage payment after refinancing?

If the refinancing cost is 2% of the remaining balance on your loan, how much longer would you need to remain in your house before refinancing paid itself off?

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