Are Bank Teaser Rate ever really Worth it?? Recently CIBC came out with a 1.99% Teaser
2016-04-12 | 22:32:57
HERE IS THE SKINNY ON THE CIBC
4 YEAR 1.99% OFFER %*****. Notice all the Asteriks!!!
ALWAYS DO THE MATH especially when you see an asterisk . LOL
Nonetheless after reading this please rest assured that at DOMINION LENDING CENTRES SUPREME we are here to help you and HAVE NO ASTERISKS when arranging a Mortgage for You. We are offering a solid 4 year 2.49% fully featured NO ASTERISK
Read the following excerpt from -Alyssa Furtado
"1. The Special Mortgage Offer from CIBC
CIBC currently has a 4-year fixed mortgage promotion with a teaser rate of 1.99% for the first 9 months, followed by 2.83% for the rest of the term. Assume you’re buying a $400,000 home with 20% down ($80,000), which leaves you with a $320,000 mortgage loan.
At 1.99%, your payments for the first 9 months would be $1,354/month. Subsequent months, when the rate jumps to 2.83%, would be $1,487. The teaser rate is a discount of $133 on the normal payment.
How does this look over the course of the 4-year term?
You would pay 9 months x $1,354 = $12,186
Followed by 39 months x $1,487 = $57,993
$12,186 + $57,993 = $70,179
What if, rather than going for the teaser rate, you just got a 4-year fixed mortgage for 2.49%, which is the best mortgage rate on our site today. In this case, based on the same $400,000 house and $320,000 mortgage, your monthly payment would be $1,432.
48 months x $1,432 = $68,736
That’s a savings of $1,443 ($70,179 – $68,736) over 4 years compared to the CIBC offer described above.
You shouldn’t just look at the numbers when comparing mortgages, however. Another key part of your decision rests on the terms and conditions of each offer. One aspect in particular you should find out is whether there are any unusual restrictions on your ability to make prepayments towards your principal."