Question

Life Situation: Megan and Sean are looking for their first home in Ontario. They are in their late 20s and have been married for three years. They still have a small amount left to pay towards their student and car loans. They do not have any children but plan to in the near future. Both Megan and Sean have steady stable jobs with good advancement opportunities. They are making housing savings. They do not want to use RRSP Home Buyer’s Plan for down payment.

Combined Gross Annual Salary

$75,000

After-tax salary

$60,000

Monthly Budget

Rent	800
Food	400
Entertainment	300
Clothing/Laundry	400
Telephone/Cable/Internet	200
Car loan payment	400
Car expenses	200
Insurance – life, car	220
Insurance - apartment	30
Household	100
Student loan payment	300
Personal expenses	150
Miscellaneous	150
Savings	1,350*
Total	5,000

* Savings - usually each month they contribute $100 to their emergency savings, $300 to their RRSPs and $950 to their house savings

Net Worth

Assets		Liabilities
Chequing Account	1,500	Car	6,000**
Emergency Savings	6,000	Student Loans	8,000***
Car	14,000
RRSPs	15,000
House Savings	45,000
Total Assests	81,500	Net Worth	67,500

** They will be finished paying for the car loan in 16 months
*** They will be finished paying for the student loans in 28 months

Question 1

Suppose the couple uses CIBC. Research the current mortgage rates at CIBC and at a mortgage broker (your own selection). The rates quoted by the brokers are usually for fixed rate, closed mortgages. Fill in the table on the answer template with your information. You can adjust the table to reflect the information available from your source. You will not fill in every cell.

Question 1

Bank: CIBC                                                                                                      Date:                                                           

Mortgage Type	6 mos	1 yr	2 yr	3 yr	4 yr	5 yr	7 yr	10 yr
Fixed rate - closed
Fixed rate -open
Variable - closed
Variable - open
Variable - capped

Broker:                                                                                            Date:                                                           

Mortgage Type	6 mos	1 yr	2 yr	3 yr	4 yr	5 yr	7 yr	10 yr
Fixed rate - closed
Variable interest rate

Answer 1

Mortgage Type	6 mos	1 yr	2 yr	3 yr	4 yr	5 yr	7 yr	10 yr
Fixed rate - closed	NA	3.2	2.9	3.7	4.3	4.9	6	6.19
Fixed rate -open	7.25	6.4	NA	NA	NA	NA	NA	NA
Variable - closed	NA	NA	NA	2.5	NA	2.5	NA	NA
Variable - open	NA	NA	NA	NA	NA	4.3	NA	NA
Variable - capped	NA	NA	NA	NA	NA	NA	NA	NA
Broker:
Mortgage Type	6 mos	1 yr	2 yr	3 yr	4 yr	5 yr	7 yr	10 yr
Fixed rate - closed		3.2	2.9	3.7	4.3	4.9	6	6.19
Variable interest rate	NA	NA	NA	2.5	NA	2.5	NA	NA