You want to buy a $300,000 house.  You plan to make a down payment of 20% of the purchase price and finance the rest with a 30-year fixed rate mortgage loan.  The loan is fully amortizing, and requires monthly payments at the end of each month.  The annual interest for the loan is 5%, compounded monthly.  1) How much of the purchase price will you finance with the mortgage loan?  2) What is your anticipated monthly mortgage payment?

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.