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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
; c3 h5 U: Q. o8 j, V3 S1. 3-year closed mortage with 3.3% and 3% cash back.
: ?- u8 `6 L7 m0 a$ N" x2. 5-year closed mortgage with posted rate 5.39% and 5% cash back& I2 h8 D) s, Z3 i
0 O. e7 a7 u, f! O& ?Option 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest7 h( Q9 M! R3 z4 l Z
If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.
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Option 2. After 5% cash back, your mortgage amount will become& Z) e% q9 h0 O
$400,000*0.95=$380,000 with 5.39% interest.
/ R/ v, H R+ M" [If you want to payoff your mortagge in 25years. Monthly PMT 2295.21 The remaining balance will be $356,351.50 after 3 years
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% Q+ m$ s# h# g& u. HBasically, for the above options, after 3 years, the mortgage remaining balance is similiar.
, J/ F8 ~9 h# o/ [7 zIf 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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