In an amortization schedule for a fixed-rate mortgage, the payment number where principal and interest portions are approximately equal is called the:
Correct Answer
C) Crossover point
The crossover point is the specific payment in an amortization schedule where the principal portion equals the interest portion. Before this point, interest exceeds principal; after this point, principal exceeds interest. For a 30-year mortgage, this typically occurs around payment 153-155, depending on the interest rate.
Why This Is the Correct Answer
The crossover point is the specific payment in an amortization schedule where the principal portion equals the interest portion. Before this point, interest exceeds principal; after this point, principal exceeds interest. For a 30-year mortgage, this typically occurs around payment 153-155, depending on the interest rate.
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