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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options. 5 S5 Q. Z2 k$ V( ~) W& Y
1. 3-year closed mortage with 3.3% and 3% cash back.! n" _: a: w/ d; R& Q# P; |! E
2. 5-year closed mortgage with posted rate 5.39% and 5% cash back
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5 a9 W2 g# d/ D/ l/ Q' _/ yOption 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest
; H. O( V0 q: TIf you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.$ C# T6 H2 h+ k- H2 u& E
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Option 2. After 5% cash back, your mortgage amount will become
$ p7 J9 X, p" C- n# [" V$400,000*0.95=$380,000 with 5.39% interest.
$ Z- z! C8 D& j+ ^5 z% [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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9 P4 B+ b q. y1 ]1 ~& `Basically, for the above options, after 3 years, the mortgage remaining balance is similiar.
: C' _5 A- c3 r6 bIf 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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