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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
7 V% _4 d; Z7 Q4 |- X1. 3-year closed mortage with 3.3% and 3% cash back.
- W8 w" u: P- |7 R3 ~2. 5-year closed mortgage with posted rate 5.39% and 5% cash back/ ~5 B2 ]0 G+ W: `# G- k
7 g" \( i8 o( r- M5 P0 A' XOption 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest
/ W' z, M2 E- e' N3 `If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.
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Option 2. After 5% cash back, your mortgage amount will become
3 i7 \& R; ]+ v7 p2 j$ o- W$400,000*0.95=$380,000 with 5.39% interest.: |: K! X; n' k# w. w/ |
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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Basically, for the above options, after 3 years, the mortgage remaining balance is similiar.
) ] e8 y1 j8 x. V3 KIf 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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