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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
/ `# N( W) f6 U$ c" y2 t1. 3-year closed mortage with 3.3% and 3% cash back.
, @# o# G2 P# D9 u1 P2. 5-year closed mortgage with posted rate 5.39% and 5% cash back4 d4 A( X+ e$ Q; w# t) s" c
1 c; ~. N: U* V2 b- {! m* TOption 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest- c( X q f3 {; x8 ^' s9 r
If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.8 P: H$ H9 E0 R/ o+ F2 b, ?
6 r6 r: t: V6 ]Option 2. After 5% cash back, your mortgage amount will become
w4 [: E7 \$ v( {, L* `, T# n3 |5 n1 M$400,000*0.95=$380,000 with 5.39% interest.2 W* `( r, l, r6 K" P$ ^7 ~6 y
If you want to payoff your mortagge in 25years. Monthly PMT 2295.21 The remaining balance will be $356,351.50 after 3 years
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2 W/ d1 ^+ @8 |1 i- e2 RBasically, for the above options, after 3 years, the mortgage remaining balance is similiar.
, g, a2 S' ?9 @/ o& z) cIf you choose the 2% cash back with 3.3%, every month you save about $398.77 monthly payment for 3 years. Total roughly saving ($398.77*12*3=$14,355) |
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