Fixed rate mortgage loan. Initial loan amount is $200,000. Semi-annually compounding rate is 5%. Amortization period 300 months, term of loan is 60 months. If this loan terminates after 30 months, at which point the semi-annually compounded rate for a 30 month loan is 2.6%, Suppose now that you are an investor in this loan. Your discount rate is .0015 per month. If you believe that the loan will definitely prepay after the 30th payment (30 months from today), but all of a sudden, prepayment penalties are banned, so there will be no prepayment penalty at the end of the loan, how much would you pay for the rights to the cashflows to the lender (how much would you pay to buy this loan from the lender)?

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general 11 months ago 2155