medium · Asset-Backed Securities
A 2/28 hybrid ARM loan for 200,000 has a teaser rate of 7.50%. At the month 24 reset, the index (SOFR) is at 5.00% and the margin is 6.00%.
What is the 'payment shock' percentage for the borrower?
- 15%
- 50%
- 22%
- 36%
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