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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
0 U- K8 R- q" l. A6 F1. 3-year closed mortage with 3.3% and 3% cash back.5 w+ r# n% p. P
2. 5-year closed mortgage with posted rate 5.39% and 5% cash back
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8 |! ~# q) d* M/ lOption 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest
6 p* I, I/ N8 B/ XIf you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.& n+ f, V# B& o8 _$ d% i
; Q# K1 K2 W0 `0 F& g2 w% | _# O& [0 l1 aOption 2. After 5% cash back, your mortgage amount will become' w# z8 ]- R& ^# G
$400,000*0.95=$380,000 with 5.39% interest.
6 u3 T2 C$ p, M1 y3 F2 s1 [3 S$ LIf you want to payoff your mortagge in 25years. Monthly PMT 2295.21 The remaining balance will be $356,351.50 after 3 years* m8 K& N* ?: |; W0 v0 P( v4 n' r
. ~& S; [( F8 g2 x: SBasically, for the above options, after 3 years, the mortgage remaining balance is similiar.
3 [ |2 K, \4 c# 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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