Hey /biz/, I'm about to buy my first home and I have a question.

Isn't this a pretty straightforward net present value analysis?

>>1937119
Maybe? I'm having a hard time determining the effective interest rate of option one. If it meets or is lower than 2.54 then I will probably go with that.

Ask for amortization schedule for each.

>>1937138
I compared the amortization schedules of 2.54% fixed, 2.64% fixed, and 2.64% fixed but with the first 9 months replaced with a 1.5% fixed rate. Am I doing this right?

2.54% first 9 months: I pay 3113
2.64% first 9 months: I pay 3236
2.64% with 1.5% for the first 9 months: I pay 1840, then continue on with normal payments at 2.64%

So after a 4 year fixed term, I'll have payed:

2.54%: $17921
2.64%: $18644
2.64% with 1.5% for 9 months:

>>1937170
Accidentally hit enter. Continuing...

2.64% with 1.5% for 9 months: 17247

So looks like with the teaser rate it's slightly better after a 4 year period. However if my calculations are correct, overall the 2.54% interest rate comes out slightly ahead once the amortization period is up, with somewhere around $1000 saved over the 1.5% teaser then switching to 2.64. However all things considered, that's basically nothing when spread over the amortization period. Does that sound right, or am I doing something wrong? I'm using this site: http://www.amortization-calc.com/ to generate amortization tables to compare.