On a fixed-rate mortgage, the 'crossover point' refers to the payment number where:
Correct Answer
B) The principal portion equals the interest portion
The crossover point in mortgage amortization is when the monthly principal payment equals the monthly interest payment for the first time. After this point, the principal portion becomes larger than the interest portion for all remaining payments. This typically occurs around payment 153 (12.75 years) on a 30-year mortgage, depending on the interest rate.
Why This Is the Correct Answer
The crossover point in mortgage amortization is when the monthly principal payment equals the monthly interest payment for the first time. After this point, the principal portion becomes larger than the interest portion for all remaining payments. This typically occurs around payment 153 (12.75 years) on a 30-year mortgage, depending on the interest rate.
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