Rate/Yield comparison question

[ Follow Ups ] [ Post Followup ] [ Cash Flow Forum ]

Posted by Brian Mac on June 13, 2002 at 14:17:26:

What would be the correct way to compare the opportunity costs for paying points to buy down an interest rate on a conforming loan?

Scenario:
250,000 loan
30 Yr Fixed

Options:
6.625% with no points
Payment: $1600.77

or

6.125 % with 3 points ($7500)
Payment: $1519.03

Assume all other closing costs remain the same.

Payment Savings: $81.75/month for 30 years
Total Payment Savings(P&I): $29,430.38

What's the best way to make a comparison?

Thank you

Brian Mac

Follow Ups:


Post a Followup

Name    : 
E-Mail  : 
Subject : 

Comments:

[ Follow Ups ] [ Post Followup ] [ Cash Flow Forum ]

WWWBoard 2.0a and WWWAdmin 2.0a © 1997, All Rights Reserved.
Matt Wright and DBasics Software Company