Why is that tricky? You need the balance at the 5 year mark. Since you are paying interest only, the balance doesn't change from month to month. All you really need is the ratio of the interest rates.
322.92*(10.75/7.75) = ??
Hey guys, desperately need some assistance with the following, would be much appreciated.
Interest Only Loan, 10 year term, 7.5%pa comp monthly i, $50,000 principle
Monthly repayments are $322.92
I need to calculate what the monthly repayment would be if the interest rate rose by 3% to 10.75%pa at the 5 year mark.
Am I right to assume discounting?
Any help would be great, cheers!