Friday Oct 31, 2014

RBC Drops Interest Rate on Line of Credit

22 October 2009

RBC logo2 150x150 RBC Drops Interest Rate on Line of CreditWe have seen residential mortgage rates rise throughout the recent weeks, and we are now seeing Canada`s largest bank drop its interest rates on its popular consumer loan.

Royal Bank of Canada (RBC) plans to reduce the rate on its RBC Homeline Plan line of credit by 0.4% to 2.7, effectively on Thursday October 22nd, 2009.

The new interest rate is equivalent of the bank`s prime rate plus 0.5%.

With this recent decrease it gives Canadian a much needed break in terms of financing on their largest purchase, their home.

As a reminder, RBC Homeline Plan is a secured line of credit; it technically is a type of home equity line of credit that can include up to 5 mortgage and 5 line of credit segments.

Generally, a home equity line of credit is a revolving credit product that allows consumers to use the equity of their homes to borrow cash.

What this means is that, the RBC Homeline Plan will allow homeowners the ability to split their home financing into various mortgage segments that can include fixed and variable rate mortgages, coupled with one or more line of credit.

The new rate is not a limited time offer, but it must be noted that it only apply to new lines of credit.

At this point in time, homeowners can use the RBC Homeline Plan to help diversify their interest rates and ultimately lower their overall borrowing costs.

RBC `s line of credit reduction comes at a time when other big banks have recently raised rates on their personal line of credits.

Toronto-Dominion Bank (TD) has informed customers that have home equity lines of credit that their base rate will increase by 1 percentage point on November 16th. This makes the lowest available rate after that time at 3.25% or prime plus 1%.

Meanwhile we have seen the Bank of Montreal (BMO) raise interest rates on personal lines of credit by 1 percentage point as well in March. However it was recently said by BMO executives that if credit spreads and funding costs continue to shrink, BMO would consider giving back some of the price increases. At this point in time there are no details on the potential timing of this.

Subscribe to Our Newsletter!

Follow us on twitter! In addition, if you prefer Facebook. Join our Facebook Fan page here. Each newsletter that we email to you will include all new articles on the website. Plus, the newsletter is entirely free!

Subscribe below:

Enter your email address:

(We don’t spam… we hate it as much as you do!)

About the Author

Sensei

My favorite weapon of choice is the samurai sword. I use it to cut my chicken during dinner, cut my hair and periodically carve my name into stone when I am bored. I love meditating on top of a 15ft high pole and eating those sushi’s with smoked salmon on top. I love everything there is about Canada and everything financially related to Canadians. I write deily posts from Canadian Banks to Credit Card information.

Comments (4 )



Jim Wrote:

I’m not sure where you get that. Just got notice that rates are increasing by 1% effective January 2010 on unsecured lines of credit.

[Reply]

Sensei Reply:

The information was taken from the RBC website, which can be found here:
http://www.rbc.com/newsroom/pdf/20091021-homeline.pdf

Also, the increase you are talking about is on their unsecured line of credit; in this article it concerns their RBC Homeline Plan is a secured line of credit.

Hope this clears up any misunderstandings.

[Reply]

jack Wrote:

Sensei this is nonsense. I also got the letter from RBC. I have 2 lines of credit; one secured against my home which was always at prime; a second unsecured which was always at prime plus 2%. Both of them are going up 1% effective January. I plan to cancel the unsecured line and will start to shop around for a better deal on the other. I’ve been a customer with RBC for 30 years with top credit ratings and these are my only debts. I’ll start to look at some of the foreign owned banks I think.

[Reply]

B-Anker Wrote:

What poeple don’t realize is that a line of credit is a networth product, good credit helps but its certainly not the end all be all. Its all fine and dandy to have 2 lines of credit but if they are both maxxed and never being paid down to 0. Thats tying up money that the bank could be lending to other people. Common Sense

[Reply]

Add a Comment




Your Comment