With the recent increase by TD Canada Trust in their line of credit interest rate, it has left many clients angry at this decision â€“ especially when majority of people that this affected have been great clients in perspective to their payments.
That said, Royal Bank of Canada (RBC) is running a promotion which will definitely be something a lot of might be interested in, seeing as it knocks off 0.5% off their home equity credit line.
What is the promotion?
RBC is allowing you to have 0.5% dropped instantly when you switch to an RBC Homeline Plan credit line.
The interest rate you will receive is 3.5% (prime + 0.5%) â€“ this would allow you to save as much as $5,000 in interest payments!
To showcase the difference in interest, I have provided a comparison in the table below:
|Amount||Interest Rate||Annual Interest|
|Amount Interest Rate Annual Interest|
|$100,000||Prime + 1%||$4,000|
|$100,000||Prime + 0.5%||$3,500|
As you can see, you are able to save $500 in your annual interest on a $100,000. In 10 years you would save $5,000.
That means, if you have a home equity credit line of around $500,000 your savings will be $2,500 a year!
In the end, the question that it all comes down to is whether it is worth it or not. Ultimately, you are saving money, which is what matters – well to me anyways .
What do you think of RBC’s promotion?