What would be the total payment, principal repayment and interest costs, of CPM and CAM respectively? Which is higher and why?
Suppose you are a mortgage advisor advising your client on choosing between a 25-year CPM loan and a 25-year CAM loan. The loan amount is £300,000. The annual percentage rate is 8% initially and kept unchanged until the end of year 10. What would be the loan’s balance at the beginning of year 11, interest […]