👉 In an effort to make things as silly and funny as possible, I will explore the concept of "b" in the context of mortgages.
Imagine you have a hypothetical mortgage that is supposed to be at 6% for a year but turns out to be only 4% because your bank mistakenly passed on your debt instead. Now, let's say your interest rate for another year increases to 5%. You would still have a monthly payment of $200 more than you did in the first year.
So what happens? When your new mortgage is offered at 6%, it will be "b" for one year and then increase to 5% over the next one. If your bank offers a lower rate, they might tell you that the interest rate has "banded up" or "bounced." This means that their calculation does not take into account the full impact of any additional costs or penalties.
Here is an example sentence:
"So, imagine you're looking at a new mortgage agreement. You've got $50,000 down on a house with a 3% interest rate. Suddenly, your bank says they'll offer you a new mortgage that's 4% for the first year and only 2% after that. The explanation? Because they think it makes more sense to keep the same 6% for the initial amount and increase the rate gradually as time goes on."
This example is meant to be humorous, but also to emphasize the absurdity
