Assume our bank is awesome and is trying to give us some options to choose from for a mortgage. The mortgage we’re going to take out is a $300,000, 30-year mortgage with monthly payments. If we pay no points, our interest rate will be 330 basis points but if we pay X points up front, our interest rate will be 318 basis points. We plan on staying in the mortgage for 108 months (9 years). What number of points would make us indifferent between paying the points to get the lower rate and not paying the points to get the higher rate? (round your answer to 2 decimals) To discount the monthly cost savings, use the 330 basis point nominal rate.
FILL IN THE BLANK. Put your answer in the form X.XX with no symbols. If your answer is 1.2691 points you would type “1.27”. Don’t round until the very end.