Personal Finance

LOC rate up, no notice?

  • Last Updated:
  • Sep 14th, 2017 2:53 am
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[OP]
Deal Fanatic
May 29, 2006
8355 posts
1322 upvotes

LOC rate up, no notice?

hey i just checked my BMO loc, the rate went from 7.50% to 8.78% last month, i know prime went up .25% in that time frame, but this is a 1.28% increase

no notice from BMO, no late payment, no missed payments.

is this normal?
23 replies
Deal Expert
User avatar
Jan 27, 2004
36659 posts
2532 upvotes
Toronto
Its normal in that its perfectly legal for them to change any and all the terms anytime they want. Its actually kinda scary sounding if you read all the fine print.

Its not normal from a customer service standpoint. It would be couteous if they let customers know. They usually do it through mail.
Member
Jun 28, 2011
229 posts
32 upvotes
VANCOUVER
UrbanPoet wrote:
Sep 12th, 2017 5:34 pm
Its normal in that its perfectly legal for them to change any and all the terms anytime they want. Its actually kinda scary sounding if you read all the fine print.

Its not normal from a customer service standpoint. It would be couteous if they let customers know. They usually do it through mail.
Yes, banks can change the rates at any time along with the terms.
And they should have sent a letter advising of the rate change and the effective date.
I'd call BMO to get more details although be prepared for a BS spiel about why they increased the rates. (that was my experience with RBC)
Deal Addict
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Mar 28, 2005
3026 posts
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Ontario / Quebec
UrbanPoet wrote:
Sep 12th, 2017 5:34 pm
Its normal in that its perfectly legal for them to change any and all the terms anytime they want. Its actually kinda scary sounding if you read all the fine print.
Really???

A bank can just change the rate for a LOC when they feel like it?
I find that hard to believe.
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Jul 17, 2008
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krs wrote:
Sep 12th, 2017 6:14 pm
Really???

A bank can just change the rate for a LOC when they feel like it?
I find that hard to believe.
They most definitely can, and they can also hang you to dry by demanding immediate repayment even if you took out 50k and thought you can now pay it monthly.
Deal Expert
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Jan 27, 2004
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Toronto
krs wrote:
Sep 12th, 2017 6:14 pm
Really???

A bank can just change the rate for a LOC when they feel like it?
I find that hard to believe.
I was shocked too... i thought hey...once you sign its solid right?

I had to read over the fine print.

Get this... they can even do it if youre a good customer! Just to alleviate liability on their books... it doesnt happen all the time. But its a possibility.
Deal Expert
Aug 22, 2011
15763 posts
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Ottawa
Yup, RBC bumped mine from 4.7 to 5.2 a week ago.
Deal Addict
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Mar 28, 2005
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Ontario / Quebec
Hmmm,
I better check into this - I have one secured and one unsecured LOC. Both tied to the bank rate.
Wonder if that makes a difference.
Deal Expert
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Jan 27, 2004
36659 posts
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Toronto
krs wrote:
Sep 12th, 2017 6:51 pm
Hmmm,
I better check into this - I have one secured and one unsecured LOC. Both tied to the bank rate.
Wonder if that makes a difference.
Youre secured one should be typically safe. Its possible but less likely for secured accounts that are well managed.

Your unsecured is vulnerable. It seems to always happen to people who have a line with low rate from a long time ago.
[OP]
Deal Fanatic
May 29, 2006
8355 posts
1322 upvotes
well I emailed my bank rep, waiting for a reply

I never received any notice in the mail or email or online banking.

not happy about this, I'm a long term customer, the loc is only around 9 months old.
Sr. Member
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Mar 9, 2012
835 posts
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KITCHENER
rocking23nf wrote:
Sep 12th, 2017 4:27 pm
hey i just checked my BMO loc, the rate went from 7.50% to 8.78% last month, i know prime went up .25% in that time frame, but this is a 1.28% increase

no notice from BMO, no late payment, no missed payments.

is this normal?
Haven't noticed a rate change on mine, still at 3.7%...but I'll probably see on the next cycle.
Deal Addict
User avatar
Sep 9, 2012
1954 posts
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Oakville, ON
rocking23nf wrote:
Sep 12th, 2017 7:03 pm
well I emailed my bank rep, waiting for a reply

I never received any notice in the mail or email or online banking.

not happy about this, I'm a long term customer, the loc is only around 9 months old.
The "notice" may simply be a monthly statement with a message on it. It doesn't have to be something separate or official-looking.
Deal Addict
Sep 7, 2004
1221 posts
226 upvotes
Toronto
The era of cheap money is over. As ULOC's are a variable rate product if the bank moves it's prime rate up so too will your interest rate. The bank has full discretion in changing your rate whenever they want without notice so people best get used to the idea that borrowing will be more expensive from here on out and that they should monitor the rate after each BOC announcement because the banks sure wont tell you!

Get this, I have ULOCs with 2 of the big 5 and I never use them (maybe only once or twice in the past few years and only for a day or two at a time to cover unexpected shortfalls as I transfer money between different accounts). I've had fairly low rates (prime + 1.5 and prime + 1.25) for the past few years. I logged in after the BOC announcement and both of the interest rates went up in lockstep with the BOC rate increase.

So it doesn't appear that they are raising it only for frequent users or high risk account. It's being done for everyone and without notice. Womp womp
Sr. Member
Feb 16, 2013
521 posts
567 upvotes
Toronto
I'm so glad I'm debt free.
Have an unused 20k line of credit.
Don't even care to see what the rate is.
Freedom.
Deal Expert
Aug 22, 2011
15763 posts
4668 upvotes
Ottawa
krs wrote:
Sep 12th, 2017 6:51 pm
Hmmm,
I better check into this - I have one secured and one unsecured LOC. Both tied to the bank rate.
Wonder if that makes a difference.
HELOC also increased.

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