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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options. ; r q# C \& M6 t, c: Y9 S- ?+ @$ s
1. 3-year closed mortage with 3.3% and 3% cash back.9 e& T* \ Z g: E) ?
2. 5-year closed mortgage with posted rate 5.39% and 5% cash back% u) \3 W: I$ {& O2 j2 m- ~* @
0 d3 e. ]% X' a: M# ~Option 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest) @5 Z/ [9 N( _
If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.
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Option 2. After 5% cash back, your mortgage amount will become
5 P& |$ l+ r, q0 U4 s% |4 Q6 n# U1 ?$400,000*0.95=$380,000 with 5.39% interest.4 d' M- q% G$ K, S/ I! d4 C+ y! i, U
If you want to payoff your mortagge in 25years. Monthly PMT 2295.21 The remaining balance will be $356,351.50 after 3 years
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7 M3 D; x1 I: H6 b6 E G( dBasically, for the above options, after 3 years, the mortgage remaining balance is similiar.
* g+ S$ M4 @; P% Z: e8 Z4 ^1 HIf 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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