Cheryl and Nabil are meeting for the first time with a financial planner at their financial institution. They are hoping to purchase their first home by early $2025.$ Both have recently turned $28$ and have been living rent$-$free with Nabil's parents since their graduation $3$ years ago. They were fortunate to immediately find employment in their field of choice and this, combined with their reduced cost of living, has permitted them to focus on their TFSA and RRSP savings plans.

Page $7$ of $11$

Part $4(2$ marks$)$

Assume the couple purchases a home with a $$400,000,$ fixed$-$rate mortgage $($fixed$-$rate mortgages are compounded semi$-$annually in Canada$)$ and they opt for monthly payments, a term of $5$ years at a rate of $6\mathrm{.}2\%,$ and an amortization period of $25$ years.

All else equal, if they had chosen instead an accelerated bi$-$weekly payment, how much interest would they save over the life of the mortgage? Round to the nearest dollar.

$\backslash$table$[[\backslash$table$[[$Total Interest with Monthly$],[$Payments$]],\backslash$table$[[$Total Interest with Accelerated Bi$-$weekly$],[$Payments$]]],[$Calculation$,$Calculation$],[$Total Interest Savings,$]]$

Part $5(1$ mark$)$

Cheryl and Nabil believe it's beneficial to have easy access to funds should they need it$.$ They have opened $3$ lines of credit, but only use one. Why is having unused lines of credit not a good idea for anyone when applying for a mortgage? State your source.

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