Question

Consider a 20-year mortgage for $213,642 at an annual interest rate of 4.5%. After 9 years, the mortgage is refinanced to an annual interest rate of 2.9%. What are the monthly payments after refinancing?

Answer 1

$ 1,244.61

Step-1-:Existing Monthly Payment
Monthly Payment	=-pmt(rate,nper,pv,fv)
	= $ 1,351.60
Where,
rate	=	4.5%/12	=	0.00375
nper	=	20*12	=	240
pv			=	$   2,13,642
fv			=	0
Step-2:Loan Balance after 9 years
Loan Balance	=pv(rate,nper,pmt,fv)
	= $ 1,40,518.05
Where,
rate	=	4.5%/12	=	0.00375
nper	=	11*12	=	132
pmt			=	$ -1,351.60
fv			=	0
Step-3-:Revised Monthly Payment
Monthly Payment	=-pmt(rate,nper,pv,fv)
	= $ 1,244.61
Where,
rate	=	2.9%/12	=	0.00241667
nper	=	11*12	=	132
pv			=	$   1,40,518
fv			=	0