MORTGAGEE
& MORTGAGOR INTERESTS QUESTIONS
1
Determine the annual repayments for a loan of $30 000 at 12% pa over
a period of 20 years.
2
Determine the mortgagee's and mortgagor's interest in the above
property at the end of year 5,10,15 if the expected market value of
the property will be $50 000, $100 000, and $200 000 respectively.
3
What do the answers in 1 and 2 illustrate about the amount of capital
repaid (under credit foncier finance) in mortgage loan
repayments and mortgagor's interests over a period of time?
4
A client has the choice of renting or buying an industrial property.
From the information below which option would you recommend?
Assume
that there are no tax advantages with the lease option.
The
asking price is $1500 000.
MORTGAGE: 100% borrowed at 16% pa over 15 years.
LEASE:
an annual rent of 20% pa.
5
A mortgage over a 15 year period has annual repayments of $4 000.
Determine the interest rate charged if the amount borrowed was $30
000. Why must the calculation be by way of trial and error?
6
A mortgage agreement requires repayments of $12 000 pa. What is the
mortgage term if the interest rate is 14% pa?
7
Your client wishes to borrow $200 000 and has the choice of 2
mortgages:
(a)
Term: 50 years Interest rate: 15.5% pa
(b)
Term: 5 years Interest rate: 15.5% pa
Which
mortgage would you recommend?
8
Determine the annual rental equivalents of the following leases:
(a)
Premium:
$200 000
Rent:
$20 000 pa
Term:
5 years
Interest
rate: 11% pa
(b)
Premium:
$5 000
Rent:
$10 000 pa
Term:
10 years
Interest
rate: 10% p a
(c)
Premium:
$2 000
Rent:
$5 000 pa
Term:
20 years
Interest
rate: 10% pa
9
Determine the Lessee's and Lessor's Interests in the following
property:

Premium: $10000

Rent: $2 000

Term: 5 years

Market rent: $5 000 pa

Interest! capitalization rate: 13% pa
10
Determine the equivalent cash price for the following sales:
(a)
Sale
price: $200 000
Interest
rate: 12% pa
Term:
20 years
Normal
interest rate: 15% pa.
(b)
Sale
price: $300 000
Interest
rate: 12% pa
Term:
20 years
Normal
interest rate: 14% pa
(c)
Sale
price: $400 000
Interest
rate: 13% pa
Term:
20 years
Normal
interest rate: 12% pa
(d)
Sale
price: $400 000
Interest
rate: 13%pa
Term:
20 years
Normal
interest rate: 13 % pa
(e)
Sale
price: $400 000
Interest
rate: 13% pa
Term:
20 years
Normal
interest rate: 11 % pa
11
How does a premium paid by a lessee 10 years ago affect his/her
profit rental today?
12
Determine the annual rental equivalent of the following lease:

Term: 10 years

Base rent: $200 000 pa

Rent free (including premium and fines) Period: 3 years

Bonus office partitioning worth: $50 000

Premium: $40000

Fines: $2 000 payable at the end of every second year.
3