John Anderson bought a home with a 10.5% adjustable rate mortgage for 30 years. He paid $9.99 monthly per thousand on his original loan. At the end of 5 years he owes the bank $65,000. Now that interest rates have gone up to 12.5%, the bank will renew the mortgage at this rate or John can pay $65,000. John decides to renew and will now pay $10.68 monthly per thousand on his loan. You can ignore the small amount of principal that has been paid.