Question

In: Finance

The principal component of the payment on a fully-amortizing fixed-rate mortgage is increasing at an increasing...

The principal component of the payment on a fully-amortizing fixed-rate mortgage is increasing at an increasing rate over the term of the loan.

Group of answer choices

True

False

Solutions

Expert Solution

The given statement is TRUE because in the initial phases of payment related to fully amortized fixed rate mortgage, majority of the component of payment is interest, but when there will be later payments, it will be majorly comprised of the principal.

Given statement is TRUE.


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