Six years ago, you took out a $1,000,000, 30-year mortgage, monthly payments at 7% interest, with no prepayment penalty. Suppose today you can get 30-year mortgages at 5% with 3 points, and you plan to sell the property after four years. What would be the current opportunity cost of capital (OCC) or yield relevant for the refinancing decision?
5.00%
7.00%
5.87%
5.33%