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  • Oct 3rd, 2014 9:32 am
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[OP]
Member
Jan 17, 2013
495 posts
126 upvotes

RBC Homeline Plan

http://www.rbcroyalbank.com/mortgages/r ... -plan.html

What is RBC Homeline plan? Getting confused by it because it seems to have something to do with line of credit and mortgage.

Line of credit: This is credit available to me after I applied. Once approved, I don't need to apply again. I don't need to use the credit, and if no credit is used, there are no fees, I do not get charged at all. If I used the credit, I get charged for what I use.

The RBC website said "Whether you're looking to buy a home and have a 20% down payment, or you're an existing homeowner with at least 20% equity in your home, the RBC Homeline Plan could be the right solution for all your borrowing needs". Sounds like if I owned 20% equity of my home, I am using this 20% to secure a loan from RBC?

Then the RBC website said "Through the RBC Homeline Plan, the money is yours to use any way you wish. Once your credit limit is set, you can borrow any time, up to your available credit limit on your credit line.". This sounds like what I describe the line of credit earlier. I setup the credit with RBC, I don't need to use the credit, there are no fees (unsure), if I use the credit, I will be charged.

Question: If I have fully paid up my home (no mortgage), is the RBC Homeline Plan still applicable? Can I setup RBC Homeline Plan account and if I don't use the credit, there are no fees or charges? Can this RBC Homeline Plan be unsecured just like how RBC offers unsecured line of credit to their preferred customers?
10 replies
Sr. Member
Apr 28, 2014
675 posts
174 upvotes
Oakville, ON
stack21 wrote:
Oct 2nd, 2014 5:33 pm
http://www.rbcroyalbank.com/mortgages/r ... -plan.html

What is RBC Homeline plan? Getting confused by it because it seems to have something to do with line of credit and mortgage.

Line of credit: This is credit available to me after I applied. Once approved, I don't need to apply again. I don't need to use the credit, and if no credit is used, there are no fees, I do not get charged at all. If I used the credit, I get charged for what I use.

The RBC website said "Whether you're looking to buy a home and have a 20% down payment, or you're an existing homeowner with at least 20% equity in your home, the RBC Homeline Plan could be the right solution for all your borrowing needs". Sounds like if I owned 20% equity of my home, I am using this 20% to secure a loan from RBC?

Then the RBC website said "Through the RBC Homeline Plan, the money is yours to use any way you wish. Once your credit limit is set, you can borrow any time, up to your available credit limit on your credit line.". This sounds like what I describe the line of credit earlier. I setup the credit with RBC, I don't need to use the credit, there are no fees (unsure), if I use the credit, I will be charged.

Question: If I have fully paid up my home (no mortgage), is the RBC Homeline Plan still applicable? Can I setup RBC Homeline Plan account and if I don't use the credit, there are no fees or charges? Can this RBC Homeline Plan be unsecured just like how RBC offers unsecured line of credit to their preferred customers?
A Homeline Plan can't be unsecured; by definition, they are using your home as security for lending in order to give you a better rate.

A Homeline Plan is essentially a collateral mortgage; you are pegging your various debts (credit card, car loan) to your house, in order to get a better rate on all of them. Scotiabank offers something similar called Scotia Total Equity Plan, or STEP.

The problem with a collateral mortgage is that if you need to discharge it, you will end up paying through the nose.

In my mind, a product such is this is geared toward someone who is just buying their home and building his life. You get a mortgage and a home equity line of credit; as the mortgage gets paid down, the limit on the home equity line of credit increases.

If your house is all paid off, and you want better rates on lending, you should get a regular home equity line of credit.
Moderator
May 28, 2012
10105 posts
2277 upvotes
Saskatoon
We have the RBC Homeline...got it after paying off the mortgage. The bank waived the mortgage discharge fee in the process. I know we will need to pay to have it discharged later but I don't plan on doing that any time soon; from a security standpoint, it's a good idea to have this rather than a clear title. If you are disciplined, it's good to have a LOC set up before you actually need it. Our rate is prime and there are no costs associated with it unless you borrow money from it.
[OP]
Member
Jan 17, 2013
495 posts
126 upvotes
Cerium398 wrote:
Oct 2nd, 2014 5:42 pm
A Homeline Plan can't be unsecured; by definition, they are using your home as security for lending in order to give you a better rate.

A Homeline Plan is essentially a collateral mortgage; you are pegging your various debts (credit card, car loan) to your house, in order to get a better rate on all of them. Scotiabank offers something similar called Scotia Total Equity Plan, or STEP.

The problem with a collateral mortgage is that if you need to discharge it, you will end up paying through the nose.

In my mind, a product such is this is geared toward someone who is just buying their home and building his life. You get a mortgage and a home equity line of credit; as the mortgage gets paid down, the limit on the home equity line of credit increases.

If your house is all paid off, and you want better rates on lending, you should get a regular home equity line of credit.
Thank you for the info. It seems like RBC Homeline plan is the regular home equity line of credit. The Royal Credit Line is the collateral mortgage.
http://www.rbcroyalbank.com/mortgages/u ... quity.html

I googled "home equity line of credit" and got this http://en.wikipedia.org/wiki/Home_equity_line_of_credit. It said "A home equity line of credit (often called HELOC and pronounced Hee-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's equity in his/her house" - looks like both collateral mortgage and home equity line of credit uses the house as collateral.

In any case, I don't need a mortgage or loan from RBC. I was looking at RBC Homeline Plan because I need a RBC Homeline account to get unlimited free chequing account at RBC.
[OP]
Member
Jan 17, 2013
495 posts
126 upvotes
Mars2012 wrote:
Oct 2nd, 2014 5:58 pm
We have the RBC Homeline...got it after paying off the mortgage. The bank waived the mortgage discharge fee in the process. I know we will need to pay to have it discharged later but I don't plan on doing that any time soon; from a security standpoint, it's a good idea to have this rather than a clear title. If you are disciplined, it's good to have a LOC set up before you actually need it. Our rate is prime and there are no costs associated with it unless you borrow money from it.
Thank you for the clarification. Good to know there is no costs associated with it unless I borrow money from it.

- Is your home used as a collateral for your RBC Homeline plan?

- Do I understand that when you discharged your RBC Homeline plan, you need to pay a discharge fee? So to avoid any charges, I just keep the RBC Homeline plan and don't borrow from it at all? Or the things you mentioned about discharge has nothing to do with RBC Homeline?
Moderator
May 28, 2012
10105 posts
2277 upvotes
Saskatoon
stack21 wrote:
Oct 2nd, 2014 6:12 pm
Thank you for the clarification. Good to know there is no costs associated with it unless I borrow money from it.

- Is your home used as a collateral for your RBC Homeline plan?

- Do I understand that when you discharged your RBC Homeline plan, you need to pay a discharge fee? So to avoid any charges, I just keep the RBC Homeline plan and don't borrow from it at all? Or the things you mentioned about discharge has nothing to do with RBC Homeline?
If you don't plan on selling your house, it makes sense to keep the Homeline; there is less risk of fraud if the bank has an interest in it. You do have to pay a fee to close it, not sure how much. You pay a fee to discharge the mortgage once it's paid off, the bank simply transferred this fee to our HELOC (presumably to be paid at a later date when we no longer need the Homeline).
[OP]
Member
Jan 17, 2013
495 posts
126 upvotes
Mars2012 wrote:
Oct 3rd, 2014 12:40 am
If you don't plan on selling your house, it makes sense to keep the Homeline; there is less risk of fraud if the bank has an interest in it. You do have to pay a fee to close it, not sure how much. You pay a fee to discharge the mortgage once it's paid off, the bank simply transferred this fee to our HELOC (presumably to be paid at a later date when we no longer need the Homeline).
Good info. Is your home used as a collateral to your Homeline or there is no collateral in your case?
Moderator
May 28, 2012
10105 posts
2277 upvotes
Saskatoon
stack21 wrote:
Oct 3rd, 2014 1:18 am
Good info. Is your home used as a collateral to your Homeline or there is no collateral in your case?
By definition a home equity line of credit means using your home as collateral...I don't think the RBC Homeline product is any different.
[OP]
Member
Jan 17, 2013
495 posts
126 upvotes
Mars2012 wrote:
Oct 3rd, 2014 1:44 am
By definition a home equity line of credit means using your home as collateral...I don't think the RBC Homeline product is any different.
Ok. Got that!
Deal Addict
Jan 21, 2014
3817 posts
1603 upvotes
Mars2012 wrote:
Oct 3rd, 2014 12:40 am
If you don't plan on selling your house, it makes sense to keep the Homeline; there is less risk of fraud if the bank has an interest in it. You do have to pay a fee to close it, not sure how much. You pay a fee to discharge the mortgage once it's paid off, the bank simply transferred this fee to our HELOC (presumably to be paid at a later date when we no longer need the Homeline).
Is that true? I have one but currently not used and I have no mortgage on it. I heard that because you have a HELOC, bank will get notified if someone tries to take out a mortgage or sell your place without you knowing (e.g. identity theft)?
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Mar 22, 2005
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Mars2012 wrote:
Oct 2nd, 2014 5:58 pm
We have the RBC Homeline...got it after paying off the mortgage. The bank waived the mortgage discharge fee in the process. I know we will need to pay to have it discharged later but I don't plan on doing that any time soon; from a security standpoint, it's a good idea to have this rather than a clear title. If you are disciplined, it's good to have a LOC set up before you actually need it. Our rate is prime and there are no costs associated with it unless you borrow money from it.
Exactily.

I just switched to RBC and I love it. It's all on-line so you can see exactly what's going on.

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