6. you are choosing between two mortgage options for a $1,000,000 property. the first option is a 60% ltv mortgage at an interest rate of 8%. this loan is an interest only loan, and it charges a 1.5% origination fee. the second option consists of two loans combined. the primary loan (first mortgage) is a 50% ltv loan at an interest rate of 6.5%. this loan computes the payment as if it were a 30-year mortgage, but the mortgage balance is actually due in 10 years and the loan charges a 1% origination fee. the secondary loan for this option is a 10% ltv loan at an interest rate of 10%. this loan is interest only and is also due in 10 years and charges a 3% origination fee. what is the effective rate of the second option over 10 years? 7.3111%
