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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
$ f* |( Z' ` H9 z" s M# K1. 3-year closed mortage with 3.3% and 3% cash back., ?6 f6 q( L+ W& c2 c0 G
2. 5-year closed mortgage with posted rate 5.39% and 5% cash back
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Option 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest
& O& {, {2 ?& J9 x" QIf you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years./ t3 q s5 C/ e, g! m4 v
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Option 2. After 5% cash back, your mortgage amount will become3 D6 V# i( s! P; U' M6 f
$400,000*0.95=$380,000 with 5.39% interest.
* M6 R, i w G& f1 `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.+ U4 Q6 Z. {, R" V) w
If 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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