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CIBC-BankFor years, CIBC has been the only Big 6 bank without an automatically readvanceable mortgage.

That’s put it at a competitive disadvantage to its peers in the HELOC market for far longer than anyone would have expected.

But now, it’s finally filling that gap with a new version of its Home Power Plan (HPP).

The new HPP is modelled after the Matrix, a readvanceable mortgage from CIBC’s soon-to-be-dismantled FirstLine division.

Like the Matrix, it will reportedly have two parts, a mortgage portion and one line of credit (LOC) account.(It would be more appealing with two or more LOC accounts—so you could separate business/investment borrowing from personal borrowing. But one LOC is better than none.)

Like all auto-readvanceables, as you pay down principal on the mortgage portion, your available credit in the LOC will immediately increase by an equal amount. That’ll make the product compatible with leveraged investing strategies like the Smith Manoeuvre.

The HPP will officially launch later this year, says CIBC. It is currently being piloted in more than 40 branches across the country.

When it formally rolls out, there’s speculation that CIBC may offer it with a free legal/appraisal package and integrated online banking, but CIBC couldn’t confirm that at this time.

There’s also no word on what loan-to-value the new product will officially launch with. Banking regulator OSFI is expected to cap HELOC LTVs at 65% later this year. (See: 65% LTV HELOCs)


Rob McLister, CMT

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