HELOC Rate Thread

[hsbc604]

I thought I should start this thread since I am currently looking for the lowest HELOC rate out there. Currently the best rate is Prime +.25 vs Prime +.5 at most Financial institution.

Anyone found a better rate, please share with us all

[Smokin' Deal Seeker]

Care to share where you received Prime + 0.25%?

[Rosico]

+1, is there a common data source for posted HELOC rates like there is for mortgages?

[Eric14]

I recently did a heloc search in southern Alberta around Feb 1st, 2012... the best I could find is prime + 1/2% at BMO and RBC. The other three, TDCanada Trust, Scotia and CIBC are all at prime + 1%. ING is at prime + .65%, but they don't offer helocs on rental properties. Both BMO and RBC will offer their best rates on rental properties. ATB is also at prime + 1/2%, but not on rental properties. I didn't see anyone offering prime + .25%.

[BryceS]

I recently did a heloc search in southern Alberta around Feb 1st, 2012... the best I could find is prime + 1/2% at BMO and RBC. The other three, TDCanada Trust, Scotia and CIBC are all at prime + 1%. ING is at prime + .65%, but they don't offer helocs on rental properties. Both BMO and RBC will offer their best rates on rental properties. I didn't see anyone offering prime + .25%.

I have a HELC at RBC at Prime+0.50 and at CIBC Prime+0.50 (Branch managers have to give authority to do the discount)

[vr6man25]

thought I would ask here,
what happens if you get a rate of prime +.5 with mortgage term 5 year.
once the 5 year term is done ,
Will the heloc rate be the same if you renew with the same lender? or will it change like the mortgage rate

[afiglee]

thought I would ask here,
what happens if you get a rate of prime +.5 with mortgage term 5 year.
once the 5 year term is done ,
Will the heloc rate be the same if you renew with the same lender? or will it change like the mortgage rate

HELOC rate can be changed by the lender any time they want. Even if you get it at Prime + 0.5 the bank can increase (or sometimes decrease) it later.
Regular HELOC is not connected to the mortgage unless your mortgage is registered as a collateral charge and the HELOC was offered to you as part of the same product (in such case your HELOC limit would automatically increase every time the principal on your mortgage decreases).
You can lock in a portion of your HELOC for a period of time under a fixed rate with regular payments, similar to your mortgage payments.

[Eric14]

Hi vr6man25, these heloc rates are a floating rate, based on the Bank of Canada prime rate, currently at 1%. Banks usually add on 2% and this is termed bank prime rate... so as the prime rate goes up or down, so does your heloc rate. Note afiglee's comment... not only is the heloc a floating rate but the banks can arbitrarily raise or lower their premium on the Bank of Canada rate... this kind of mortgage financing is not for the faint of heart.

One of the advantages of a heloc vs reg mortgage financing is that your heloc account can be used as a revolving line of credit, ie, you can borrow against the money that you have repaid against the principal borrowed, so if you have to replace your hot water heater for example, you can remove some of the money you have paid back. Second, your pay back is flexible, you can pay as little as the interest owing, or you can have your whole pay check direct deposited into the account and pay your expenses from your heloc account... so that all your money is working to reduce your interest which is calculated on your daily closing balance. And finally you might inherit some money and pay out the heloc loan with no penalty.

You will be surprised at the psychology of this strategy of paying off your mortgage as you realize that you, not the bank, are setting the terms of your repayment schedule. You are free to choose how much interest you want to pay for borrowing. If you want to pay interest for 25-30y, then a conventional mortgage is the right choice.

The big question is whether these advantages outweigh the security of mortgage rates like 2.99% for 4-5 years that are presently being offered. Because the future is unpredictable, you will have to determine your tolerance for risk. One nice thing is that if interest rates do start to rise appreciably, you still have the option to organize a conventional mortgage. Note too that over the last 30? years, there have only been a couple of short periods of time when fixed rates outperformed variable rates... who knows if we are due for another of these periods when fixed rates outperform variable rates. Heh, heh, I locked in my electrical rate, but went heloc... man of two minds : )

Last thought, if you can raise 20% of the selling price of the property you are buying, for your downpayment, then you can save yourself the 3-5000 CMHC mortgage insurance costs.

[afiglee]

Care to share where you received Prime + 0.25%?

Laurentian Bank was offering Prime + 0.25% till October last year through their broker channel. I do know if it was available outside of Quebec and if it still possible to get this rate now. Hopefully a mortgage professional can comment on this.
On their retail web site I see 3.65% for the HELOC and they call it "line of credit base rate" (rather than Prime + ...) which "can be modified without notice".

[everylittlecent]

we had our mortgage setup the way explained above by Eric.

We had a HELOC limit and out of that what ever we owed the bank was taken out and put in 3 different fixed terms (within the HELOC account). The 3 were 1yr, 2 yr and 3 yr terms. So basically we would just renew a new 3 yr term every yr (the one yr term would expire making the 2 yr term the new 1 yr and the 3 yr term the new 2 yr term and so on ). If you dont renew then basically it would fall back into a revolving portion payable at prime when we had it.

At present its at P + 3.75%. went in last week to discuss something else and also asked for P + 0.5%. will know if its approved next week or so but not too concerned as the balance owing is very very thin Very handy have never had to apply for any loans at all

TD is the bank

[afiglee]

TD has offered me 3.75% on a new HELOC if I keep my mortgage with them. They did not want to go any lower. And there is a $495 registration fee for a HELOC. And a $270 discharge fee if you want to close the HELOC.
Still looking for a better rate, 3.5% or lower...

[Eric14]

Interesting how we become 'married' to our financial institution and can't leave for a better 'deal' a couple of blocks away.

[afiglee]

Interesting how we become 'married' to our financial institution and can't leave for a better 'deal' a couple of blocks away.

The only problem is to find that deal. Any suggestions?

[hello99]

National Bank is offering Prime + 0% to engineers...I have a contact if anyone is interested.

[Infrared]

National Bank is offering Prime + 0% to engineers...I have a contact if anyone is interested.

i'm very interested, but do you know how long it takes to open and actually to get the money?