Real Estate

# How to find out the posted rate of CIBC

• Last Updated:
• Sep 15th, 2017 10:44 am
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[OP]
Newbie
Aug 6, 2017
14 posts

## How to find out the posted rate of CIBC

I am going to terminate my mortgage with CIBC and asked them about the penalty. It's 3 year fixed and they told me the calculation is (3.39-2.89) % * remaining amount * remaining time. 3.39 was the 3 year fixed posted rate when I got the mortgage. 2.89 is the current 2 year posted rate. However, I really doubt about the 2.89. I would have thought it should be much higher. When we got the mortgage, the discounted rate was 2.19 for 3 year fixed and posted rate is 3.39 and the diffrence is > 1. And they are telling me now posted for 2 year fixed is 2.89? would the discount rate be lower 1.89 then?
I think this is a trick the bank is playing on me but how can I find out the true posted rate? Or I have to accept it even though I know they are taking advantage of me?
Last edited by AugustRush1986 on Sep 5th, 2017 1:58 pm, edited 3 times in total.
8 replies
Sr. Member
Dec 4, 2004
567 posts
GTA
Deal Fanatic
Feb 2, 2014
6610 posts
Toronto
AugustRush1986 wrote:
Sep 5th, 2017 1:58 pm
I am going to terminate my mortgage with CIBC and asked them about the penalty. It's 3 year fixed and they told me the calculation is (3.39-2.89) % * remaining amount * remaining time. 3.39 was the 3 year fixed posted rate when I got the mortgage. 2.89 is the current 2 year posted rate. However, I really doubt about the 2.89. I would have thought it should be much higher. When we got the mortgage, the discounted rate was 2.19 for 3 year fixed and posted rate is 3.39 and the diffrence is > 1. And they are telling me now posted for 2 year fixed is 2.89? would the discount rate be lower 1.89 then?
I think this is a trick the bank is playing on me but how can I find out the true posted rate? Or I have to accept it even though I know they are taking advantage of me?
That's not how IRD is calculated. Either you understood the rep wrong or the rep doesn't understand.

You have to apply the discount to the posted rate you got when you first got your mortgage and apply it to the 2-year posted rate when making the calc.
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
[OP]
Newbie
Aug 6, 2017
14 posts
on CIBC's website it does say when calculating the difference using "interest over the remaining term of your mortgage, calculated at your current mortgage interest rate, plus any interest rate discount you received." Sadly it is the posted rate. The bank is robbing money from us. When I signed the mortgage, the mortgage specialist said " the interest was going up so you will only pay 3 months interest. you wont pay for the IRD"
Jan 15, 2017
2428 posts
Sadly, very few mortgage specialist know how the IRD is calculated and when it applies.
Deal Fanatic
Feb 2, 2014
6610 posts
Toronto
Difference in interest rate calc. for Big Banks:

Contract rate - Posted Rate Of Remaining Term - Discount On Original Rate From Original Posted Rate.

Difference in interest rate for a lot of monoline lenders:

Contract Rate - Posted Rate Of Remaining Term....none of that discounted rate adjustment BS like the Big Banks.
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Sr. Member
Apr 5, 2009
998 posts
AugustRush1986 wrote:
Sep 5th, 2017 1:58 pm
I am going to terminate my mortgage with CIBC and asked them about the penalty. It's 3 year fixed and they told me the calculation is (3.39-2.89) % * remaining amount * remaining time. 3.39 was the 3 year fixed posted rate when I got the mortgage. 2.89 is the current 2 year posted rate. However, I really doubt about the 2.89. I would have thought it should be much higher. When we got the mortgage, the discounted rate was 2.19 for 3 year fixed and posted rate is 3.39 and the diffrence is > 1. And they are telling me now posted for 2 year fixed is 2.89? would the discount rate be lower 1.89 then?
I think this is a trick the bank is playing on me but how can I find out the true posted rate? Or I have to accept it even though I know they are taking advantage of me?
It sounds like you were given quite a bit of a discount when you got your mortgage... based on what you said... if the 3 year posted rate was 3.39% and you got 2.19%, you were discounted 1.2%. Based on how their calculator works, you have to minus this discount off a comparable term with what you have remaining... (lets say 2 years remaining... which CIBC posted rate for 2 years is 2.94%)

You received (3.39% - 1.20% = 2.19%)
Taking the same discount off the 2 year posted (2.94% - 1.20% = 1.74%)
Rate Difference= 2.19-1.74 = 0.45%

Like Skeet50 said, use their calculator to get an idea of the dollar figure... else just call in and ask what your penalties look like.
[OP]
Newbie
Aug 6, 2017
14 posts
Steven91 wrote:
Sep 11th, 2017 12:27 pm
It sounds like you were given quite a bit of a discount when you got your mortgage... based on what you said... if the 3 year posted rate was 3.39% and you got 2.19%, you were discounted 1.2%. Based on how their calculator works, you have to minus this discount off a comparable term with what you have remaining... (lets say 2 years remaining... which CIBC posted rate for 2 years is 2.94%)

You received (3.39% - 1.20% = 2.19%)
Taking the same discount off the 2 year posted (2.94% - 1.20% = 1.74%)
Rate Difference= 2.19-1.74 = 0.45%

Like Skeet50 said, use their calculator to get an idea of the dollar figure... else just call in and ask what your penalties look like.
thanks a lot for the detailed explanation!

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