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Let's say a customer wants to transfer $400,000 mortgage to CIBC. He has 2 options.
/ N) [& X/ f' X1 L9 `6 z1. 3-year closed mortage with 3.3% and 3% cash back.
6 I" v; E0 ~$ E' p; x. ?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# F2 f9 Q1 e; U% \If you want to payoff your mortgage in 25 years. Monthly PMT $1896.44. The remaining balance is $356,393 after 3 years. R9 @6 q9 l" M% H# B. z9 V
2 v$ L- Z: B. W% g5 wOption 2. After 5% cash back, your mortgage amount will become# _" z9 g ?/ g+ O2 Z
$400,000*0.95=$380,000 with 5.39% interest.3 z K, c% m% h& k, j4 l
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.
# G) [8 E7 r; h5 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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