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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
6 b0 P8 k( S/ C/ S1 c! ~: {1. 3-year closed mortage with 3.3% and 3% cash back.
) g, h" ?( j v8 t8 s; a' l3 ~3 u3 Y2. 5-year closed mortgage with posted rate 5.39% and 5% cash back$ e, L6 t; H( @2 P: k) s4 G/ p
9 M/ A* h& u( p8 L! J' W, E' V- _ }Option 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest3 a6 `, ?- }* j1 s7 k( ^! C' T0 `
If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.
$ F Z7 V# X7 @4 D+ ?. J
1 V6 N. V+ @! Y8 sOption 2. After 5% cash back, your mortgage amount will become: S7 c4 ], v. D, q
$400,000*0.95=$380,000 with 5.39% interest. ~% Q3 Z3 q. w! e# S* @! i6 p# {& R
If you want to payoff your mortagge in 25years. Monthly PMT 2295.21 The remaining balance will be $356,351.50 after 3 years" v7 J1 O% N' R. n
. z! _% M' ~/ Q$ A( ?, @Basically, for the above options, after 3 years, the mortgage remaining balance is similiar.
1 s @- {0 k0 g$ _8 J% PIf 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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