Which Mortgage Option Is Best in the Following Scenario

question 29

Multiple Choice

Which mortgage option is best in the following scenario.The Jones are purchasing their first home for $250000 and financing with a $200000 mortgage.They expect interest rates to stay the same for the next five years and have no prospects for any increase in their incomes.The prime rate is three percent.

• A)A five-year closed mortgage at five and a half percent
• B)A four-year closed mortgage at five and a half percent
• C)A five-year open VRM at prime plus three percent
• D)A two-year open convertible VRM at prime plus three percent

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