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Scenario
Four |
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How
to sell the future benefit of the Scotia STEP program
(stated interest rates are for illustration purposes only)
The Scotia STEP program can be used as a tool to 'peel off'
a portion of their mortgage. In other words, re-lend the clients mortgage
back to them at lower interest rates.
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Original Mortgage: $100,000,
6.0%, 5 year term, 25 years, Payment $639.81. |
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Customer approaches you
2 years later to discuss blending interest rates, mortgage balance
is $96,291.
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You arrange a new 3 year
term mortgage at 4.5% to prepay existing mortgage. |
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New mortgage $15,000, 3
year term, 23 year amortization, payment $83.99. |
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Scotiabank will re-amortize
the original payment amount due to prepayment. |
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Total
Payment is $627.13, Average APR is 5.70%!!
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