RBC has a new campaign to promote its prime + 0.50% lines of credit (LOCs). Its ads will appear on 270 billboards, 85 newspapers and 50 radio stations. (See this Post story.)
Despite RBC’s media push, this isn’t big news. Prime + 0.50% has been around since fall 2009 (See RBC Cuts HELOC Rates).
Moreover, and contrary to the Post’s article, BMO is not the only other Big 6 bank with prime + 0.50%. Other banks don’t conspicuously promote it, but well-qualified borrowers can often get that rate just by calling a mortgage specialist and quoting RBC and BMO.
Banks also offer prime + 0.50% through the broker channel, as they have for well over a year now.
Lidia Parfeniuk, an S&P credit analyst, told Bloomberg: “We have observed that the banks are ratcheting up competition in the pricing of retail (particularly mortgages).”
RBC’s Canadian Banking boss, David McKay, says: “We’re attacking, aggressively…Now is the time to attack on price, because that’s a big differential to the customer.”
Low rates are always welcome, but with prime + 0.50% widely available, you’ll also want to compare LOC features.
Here are some common differences that separate competing lines of credit:
Mortgage features and rates
This is obviously a factor if you’re getting a mortgage along with your credit line—i.e., a readvanceable mortgage.