Personal Finance

Rate on new RBC Homeline Segment

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  • Mar 29th, 2014 6:41 am
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Newbie
Jun 16, 2010
72 posts
17 upvotes

Rate on new RBC Homeline Segment

Hi guys. My mortgage comes up for renewal end of June.

I'm looking at RBC Homeline 5 year variable. Not the rock bottom rate, but their location is good and I'm happy with how everthing is set up, so I'm okay with 10 bps spread for the convenience.

My question is this: Today my mortgage is only $250k, so I'd renew this amount. I'd also have access to a line of credit. I'm told that I can take out money in my LOC and then roll that into a a fixed or variable segment. So lets say later this year I do a $150k reno. I might end up with a $250k "original" segment on a 5-year variable, and then a $150k "reno" segment that I lock into for say a 4-year fixed.

My question is: when I roll my "reno" line of credit balance into a fixed segment, what sort of rate will I be looking at? Will RBC give me a deep discounted rate (as they're offing now), or will I be stuck with the posted (very high) rates?

In other words, what sort of rate can i expect to get with RBC when I add an additional segment to my homeline mtg?
2 replies
Deal Fanatic
User avatar
Jan 6, 2002
6833 posts
7575 upvotes
Toronto
With RBC Homeline, you can add new mortgage segments at any time up to the limit of your collateral charge (the 80% appraisal evaluation that sets your overall Homeline limit.)

The mortgage segments are whatever you set up for that segment when you sign the papers. Each segment can be different (term, type, rate, etc) and come due at different times.

Having multiple mortgage segments coming due at different times will make switching to another provider more difficult.

In my personal experience, the rates I get from RBC for my Homelines are "the same" within 10bp of what competitive new mortgages at RBC in general are getting. I haven't experienced any "gouging" because the bank know I'm held hostage.

Just today I renewed a fixed mortgage segment to another 5 years, and transferred a significant portion of my line of credit balance to that segment at renewal. I also had the option of opening a completely new mortgage for that balance, but that didn't make any sense for me.
Si Tacuisses, Philosophus Mansisses
Jr. Member
Nov 9, 2012
119 posts
11 upvotes
GUELPH
I've done this with RBC and the rate on the new 2nd segment has the same treatment as your original mortgage offered rate. In fact, my second one is lower than the first due to the timing.

As another poster mentions, it does create fluctuated timing on your mortgages which is a bit of a pain if you don't line them up for the same renewal period.

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