Q 22 A mortgage broker is offering a 25-year $177,900 mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 3.4 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 6.4 percent APR.   What are the monthly payments in the first two years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) MONTHLY PAYMENTS?     What are the monthly payments after the second year? (Do not round intermediate calculations and round your final answer to 2 decimal places.) MONTHLY PAYMENTS?

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.