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RBC offering Prime + 0.5% on their Homeline Plan Credit Line

29 October 2011

As I was taking some time to go through a few deal websites, I decided to visit RedFlagDeals. I haven’t been on it for some time (not sure why, it’s a great site).

Anyways, I came across a great deal that I have to share with everyone; I am sure a lot of people will be interested in a secured line of credit at Prime + 0.5%.

What is the deal?

As we all know, interest rates have been at historic lows; the prime rate is currently at 3%. For many people who have looked into interest rates, you will know that the majority of banks are offering a secured line of credit against your home at prime + 1%.

The Royal Bank of Canada (RBC) is offering anyone who switches their secured line of credit to their RBC Homeline plan credit line at a rate of Prime + 0.5%.

That is right, with the prime rate being 3%, your secured RBC Homeline plan credit line rate would be 3.5%.

Not bad right? Well it gets even better.

How does it get better?

For anyone who switches over, RBC will pay so they can get out of their current agreement.

RBC will pay the basic title insurance fee (this does not include the migration fee), appraisals/ property valuation fee and one discharge/ switch out fee t another financial institution (up to $300 maximum). Keep in mind that this offer excludes any mortgage payment charges that you may have to pay. The minimum advance is $50,000.

Is this deal worth it?

Now, considering that many banks offer you’re a rate of Prime + 1%, then you are winning. To showcase the difference, see the table below:

AmountInterest RateMonthly Payment
Without RBC Homeline Plan Credit Line$100,000Prime + 1%$1,012.45
With RBC Homeline Plan Credit Line$100,000Prime + 0.5%$988.86

As you can see in the table above, the savings you can make is $23.59/ month. In my opinion, any amount of savings is good. You are hitting double digits here, so it may not be too bad to switch.

I am not saying it is a thing you need to do, but it is always something to consider, if you are finding your rate to be a unsatisfactory.

What do you think of RBC’s rate and switch deal?

About the Author


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 (3 )

Joel Olson Wrote:

Not as exciting as it looks, because there are still several banks offering the same thing. National Bank and First Line, being some. That being said a mortgage is always cheaper and a lot of people take the advantage of the “credit line” to have just in case, when they don’t have equity to make it work or even plan on using it.

My view its’ a bad deal.


Betty Wrote:

a mortgage is always cheaper? the effective interest rate on a mortgage is higher then you think with semi-annual compounding…a credit line is calculated daily and paid monthly with no compounding like a mortgage…i have a homeline with Royal and notice a savings in my interest cost immediately! Also, as i pay my mortgage my available limit goes up on my credit line…i like the flexibility of having that money available just in case…when i want to buy my next car or pay off my “christmas shopping visa” i can transfer the money or write a cheque! I have the benefit of fluctuating (flat) prime on my credit line as well as the security of a locked in rate on part of my mortgage and variable on another part…i would also say the “banks” that are offering it are not one of the top banks…so i guess it depends on where you want to go…

Raif Wrote:

The more I read about mortgages and lines of credit the more receptive I am becoming of Islamic Mortgages. As it is illegal under Islamic Law to collect interest on money advanced for any reason leave it to the Arabs to figure out a way to get around the problem. Arabs need to borrow just like anyone but their venue is much different than our approach here in the west. The lender becomes an invesor in the asset and as such take the same chance as the registered owner on the appeciation or depreciation of the property. The principle owner must surrender the debt by an agreed upon date and that is usually made by using savings to pay the proportional increase relative value of the asset or an interest free short term loan. So for example if the term is ten years on $150,000 and the advance is 1/3 of the value with the asset appreciating by $50,000 his share would be $15,000 +/- plus the initial loan amount. Where the broker really makes money are on assets that appreciate by the millions of dollars over 3,5 & 10 year periods. An owner is willing to share the windfall as he sees it at no cost to him unless he is a high roller.

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