Comparing Two Mortgages (Incremental Cost of Capital)

M

MaxWaynecrest

New Member
Joined
Jul 24, 2013
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4
Hello,

I'm trying to solve for the incremental cost of capital for two loan options:

Option 1 (Recourse): $1.5MM loan amount, 4.25% coupon, 10 year balloon, and 30 year amortization
Option 2 (Non-Recourse): $1.0MM loan amount, 4.50% coupon, 10 year balloon, and 30 year amortization

I've built out my amortization tables, but I am having trouble calculating the incremental cost of capital - without using a NPV/Rate function - for Option 1 against Option 2 (above). Any help with a simple formula would be great help. Thanks in advance!!!
 

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