In January 2001 you purchased a home for $250,000 with a 30 year mortgage with a 6% interest rate. The down payment was $50,000 and the fees paid upfront are $2500. After fifteen years of payments you noticed that new 30 year rates are at 4% and 15 year rates are at 3.0%. If the cost to refinance is $2000 would you refinance (show calculations and comments)?
Show the fifteen year solution
Show the thirty year solution