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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
2 `. y: o7 \2 d1 a0 B& S: |7 k1. 3-year closed mortage with 3.3% and 3% cash back.
6 _) V ~ z! ~$ e$ g& [/ [2. 5-year closed mortgage with posted rate 5.39% and 5% cash back
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$ S5 \% ^& O1 v3 [: U. ^Option 1. After 3% cash back, your mortgage amount will become $400,000*0.97=$388,000 with 3.3% interest$ O: n8 o7 i* {* w5 h% f! K
If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years.$ J I7 f0 g9 z0 c, q
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Option 2. After 5% cash back, your mortgage amount will become
) o, ~% f- n/ |$400,000*0.95=$380,000 with 5.39% interest." ]& H1 U* ~( N; L# A7 a
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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4 q5 A s+ ]1 m4 E \: V1 OBasically, for the above options, after 3 years, the mortgage remaining balance is similiar.
, ]* a& [' `( g9 Y' m; `' ~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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