you can use the equity in your house for a secured RCL (royal credit line) — rate is prime plus 1%

no homeline unless you have the mortgage with RBC.

There really is no conversion here.

To do on what you want, firstly, tell RBC that you want to get a secure LOC and move the unsecure balance to secure LOC. Once RBC has approve you and you accept, at that moment in time, your balance will be move, and unsecure LOC will be close down.

Hope this helps out.

Ched

I went through a broker to set up my mortgage so there is no connection to RBC for that.

My question is can I still go to RBC and convert my current line of credit to a homeline, or another secured line of credit, by using the equity in my house as security?

Would love to get my interest rate decreased… any feedback would be helpful.

and yes the 5 major banks are making a lot of money. The money is put back into the country ie: employees and shareholders.

there aren’t just a few owners, all the banks are on the stock market. I work for a bank and just noticed how when buying the shares in 2008 have almost doubled since. I’m richer, the bank is richer and the economy is doing great.

From my experience, the only people who hate the banks are the ones who can’t manage credit and blame the bank because they cannot pay back loans (credit lines, credit cards, car loans). And now they hate the banks which have a stricter lending criteria.

I’ve worked at a bank for 3 years and recently quit because I just realized how stupid people are. Then again, I worked in a location that had only immigrants and bums.

No one is saying that the American system with its thousands of banks is the answer (because it is not), but rather that a move be made to increase the number of banks beyond its present level. Obviously, minimizing risk is part of the Canadian psyche, but surely common ground could be found. Defenders of the Canadian system like to state that the Banks are entitled to their huge profits, as it is just Capitalism at work, when in actuality it is the socialist aspect of Canadian banking system that provides such easy profits.

The day that a Richard Branson opens a bank in Canada, will be a welcome and positive first step, it will certainly be a day of celebration at my residence. No, Virgin Banking will be no kind of savior, but at the least they will provide one more option, and by virtue of that, the remaining banks will have to scramble to recoup their lost revenues. The winner will be the Canadian public.

get er done Richard, Canada needs you to do what you do best, shake the tree a bit

You are playing with #’s to make them look worse than they are. A 1% increase is 1 percent. Not 67%. Yes I know what you are gtting at but it is still playing with #’s.

My remark about lending at 3.25% being practically free is that it is. Let me ask you this. If you had $100,000 or $1,000,000 to invest and someone came to you and said lend it to me at 3.25%. You would tell them to get lost, it is not worth your time even with a house as collateral. 3.25% once you factor in taxes and inflation means you are actually losing money. So while I do not like my HELOC going up 1%, you still need to put it in perspective.

You mention OSFI saving the Canadian Economy? They are the ones who almost FU&^%$ it up restricting what banks can and can not do. Everything the Canadian banks didn’t do (Exception CIBC and National) that the Americans did do was not done because they weren’t allowed to but rather they chose not to. Banks had the ability to go neck deep into sub prime but didn’t for the most part.

Banks lend their money on heloc’s from the bond market or overnight market. Bank accounts are used for different lending purposes. When LIBOR went up every bank who was lending at prime was taking a beating and losing a crap load on their HELOC business at prime. This is no secret, ask any independent economist anywhere and they will all tell you that as will any University Professor, CNN, BBC, BNN, etc… Lending at prime was never done many years ago or very rarely. Out of greediness banks generally offered it to everyone over the past 10 or 15 years versus their elite clients only and thus overexposed them and they took a beat down. A good client changed from someone with 7 figures on deposit to anyone with a pulse.

They have now learned their lesson and won’t be so stupid again and thus the interest rate hike. Does the hike mean banks are in trouble??? No, it means they are not stupid and while they may get burnt once they will not let it happen again.

The Canadian banks make pretty good money (Several Billion). But you need to remember they are massive in size and a few billion isn’t actually all that much. Most of the Canadian Bank are major Global players. RBC is all over the US and South America. TD has more branches in the USA than Canada. Scotia is all over Latin America. These are not the same little Canadaian Banks many Canadians think they are.

While CIBC has made Billions for many years they almost went Bankrupt when Worldcom and Enron hit and again over Sub-Prime. Making a few Billion is not a lot for companies this size and scope.

So yes, Prime + 1% sucks for me and you. but we have a choice if we do not like banks. Don’t use them. borrow from your friends and put your cash in your mattress and if you want to buy stocks or bonds fly to Toronto, New York or London to buy your stock or you can go to your bank and buy it for $9 on-line. The banks are too smart to be stupid. If you don’t like em, at least buy stock in them. That is what I did last year and I am smiling.

> As for your comment about the banks getting us into this.
Yes, you are correct, the Canadian bank didn’t get much into the problem. It was mainly & mostly the US bank.

> Actually the Canadian Banks saved our economic buts compared to what is happening in the US
> and globally.

The Canadian Bank didn’t save our economics. It is the Canadian government OSFI (Office of the Superintendent of Financial Institutions Canada). They are the one who made sure the Canadian bank do get into too much of the sub-prime.

> So while I appreciate you do not like a higher int rate which is the same as me and the rest of the world…
> You need to understand big picture. Lending at 3.25% is hardly gauging. It is practically free money. If the
> bank was actually making 3.25% I wouldn’t even call that gauging and we all know they are making no
> where near 3.25% when they lend at prime + 1.

I personally, I think I understand the big picture quite well.

Lending at 3.25% is practically free?!? Why would you say 3.25% is practically free?
If it was practically free, would be 0% or close to 0%? What is the difference between 0% vs 3.25%?

Currently, TD top saving interest rate is 0.75% for people who has over $60K in their account. Can you compare 0.75% saving rate vs 3.25% mortgage rate? What is the spread on this?
(0.75% – 3.25%) / 0.75% = 333%

Beforehand, if we compare 0.75% saving rate vs 2.25% mortgage rate? What is the spread on this?
(0.75% – 2.25%) / 0.75% = 200%

Therefore, how much more spread did the bank make when they decided to increase P+1%
(ie. 333% vs 200%) (200% – 333%) / 200% = 67%

Personally, I think this quite high. Don’t you agree?

However, I understand that the people & bank needs to make money. There is nothing wrong in them making money. The bank provides a wonderful service. My big issue is why do they need to change the EXISTING HELOC to P + 1%?

By changing the agreement/rate, doesn’t it say that Cdn bank are in financial trouble and need more money to keep a float? What does it mean?

Chad

I myself work in the financial industry, and understand how the bank work quite well.

Why would the bank want to return the rate back to Prime? If nobody complains about it, they have no incentive to switch back to Prime.

Furthermore, between a mortgage & variable rate open HELOC is more higher risk for the bank. Hence, they need interest payment.

Chad

Are you by any chance working for the banks because by tone of your reply it seems you do.

FYI – No where in the contract does it says” they can raise rate” it just reads “we may change the agreement”.
Its a big difference. The rates are low now so what happens when rates go up. Do you think the banks will lower their rate back to prime..

We all know the banks are Crooks and Cry Wolf at every chance they get to increase rates.