Mortgage rates will differ from lender to lender, and if you are seeking great rates and professional service, then RBC should top our list.
Mortgage Rates With RBC
RBC mortgage rates are among the most sought after all throughout Canada. That’s because it has the largest number of customers out of any bank in Canada.
RBC Royal Bank is the biggest bank in the country with over 10 million domestic clients and 16 million worldwide. The bank is also rated among the largest in the world based on market capitalization.
Generally, RBC rates are similar to those of its Big 6 peers. The bank rate matches other big bank rate quotes on a routine basis. An attractive benefit to the bank is that it has the lowest funding costs of any lender in the country. This means that if it really wants to, it can overcome almost every lender’s prices. But this is usually not the case, in our experience.
RBC Posted Rates
RBC maintains “posted rates,” special offer rates, and discretionary rates, like all Big 6 banks. Posted rates are non-discounted rates used by banks for reference and penalty calculation purposes. They are not actually considered to be the rates that most customers pay.
RBC usually promotes special offer rates which are considered to be discounted rates.
Typically, discretionary rates are the greatest mortgage rates for banks. Only well-qualified borrowers have access to them, and you often have to negotiate to even get them.
The bank offers a wide range of mortgage options like standard fixed and variable rates, as well as loans for hybrid, cashback, and construction draw mortgages. RBC’s most popular term, like most borrowers, is its 5-year fixed term. The second most common term is its variable option. This one comes with fixed payments that do not rise or decline when the prime rate changes.
A lot of RBC mortgage rates are fitted with a standard 120-day hold 10% lump sum and 10% prepayment privileges, optional double-up payments, and a Skip-A-Payment feature.
Prolonged amortizations for up to 30 years are available. But if the amortization is over 25 years, RBC can charge a higher rate of about 0.10 percent.
With respect to payment frequency, you can select one of the following on RBC mortgages: monthly, semi-monthly, bi-weekly, weekly, accelerated bi-weekly and accelerated weekly payments.
One final note: Be mindful that violating a closed mortgage from RBC entails a penalty and a discharge/assignment fee (up to $250 in some provinces as of January 2018).
The RBC Homeline Plan is the marquis product of RBC. Homeline is a Readvanceable mortgage which is part of the home equity line of credit (HELOC) and part mortgage. Once you start to pay off your mortgage principal, you have the option to re-borrow those funds from the credit line.
You need a good credit rating and a minimum of 20 percent equity to get a Homeline. The maximum credit line cap is 65% of the estimated home value. Homeline is a collateral charge mortgage that helps you to borrow more without consulting a lawyer, but may also cost you more when you switch lenders.
RBC Homeline has a number of common uses that include use as an emergency fund, a source of money for renovation, business credit, and leveraged investing.
A few other benefits of Homeline:
- You will have the ability to split your mortgage between a fixed rate and variable rate. This is convenient if you want to diversify your interest rate exposure.
- Simple accessibility to credit line funds via ATMs, online banking, and branches.
- Interest-only payments.
How To Go About Getting An RBC Mortgage
The bank sells RBC-branded mortgages exclusively through its mortgage specialists, branches and call centres. It does not participate directly in the mortgage broker channel, but it funds several mortgage broker lenders from its subsidiary, RBC Dominion Securities.
The support line for the RBC mortgage is 1 (800) 769-2511.
Using An RBC Mortgage Specialist
Mortgage specialists are the bank’s main sales channel. Basically, they are commissioned, representatives. Their direct compensation and/or bonus may be based on factors such as the amount of your mortgage, the type of mortgage, and the price at which they sell the rate to you.
There is one very significant thing to remember regarding mortgage specialists. They’ve got the power to buy down” the interest rate. To do this, they will trade some of their commissions for a lower rate. People should keep this in mind when going to get a mortgage.
A few other things to keep in mind:
- Mortgage specialists aren’t there to serve RBC customers who are coming up to their renewal.
- If you are seeking a referral for a mortgage specialist, then send us an email.
Pre-Approvals with RBC
If you’re looking for pre-approval, RBC is recognized for its simple online process. It begins with a pre-qualification (start here). The bank states it should take only 60 seconds.
You will then be linked to the online mortgage specialist. Upon providing more information and verifying your qualifications you are entitled to a rate (up to 120 days on pre-approval, without obligation).
How Does One Get The Best RBC Mortgage Rate?
The RBC mortgage rate known to be negotiable. You should never accept the very first-rate that you are quoted from the bank. The reps at the bank are incentivized to reach an agreement with you and close the deal.
It is best to always compare the rate you are quoted to others on this website and ask to see if the bank will match it. The bank’s reps have what is known as a floor rate. Without a management authorization, they cannot go below that floor rate. A good tactic is to ask them to request a management exception to get you better rates and also use some of their commission fees to buy down your rate.
If the bank continues to refuse to lower its rate enough, tell the rep that you’re going to shop for other lenders and get back to you if they can bring up rates that will be more competitive.
Renewing An RBC Mortgage
Individuals who renew often don’t get the greatest loan rates from the bank. Higher rates are often offered, such as “Special Offer” rates (which are not so amazing). In some cases, bank clients were even known to receive renewal letters with advertised prices.
If you renew your RBC loan, make sure to negotiate for the best possible rates. It’s been said before and said again, never accept the first renewal offer that you’re provided with. It’s best to start early, at least 60 to 120 days before renewal to give you time to search around.
Pros Of RBC
Getting a mortgage through RBC has a number of benefits:
- Full-service: Dealing with a big institution like RBC is beneficial because you know that you will have access to a large range of products like secured loans, investment products, and banking accounts.
- Reputation: RBC is known to be one of the most reputable lenders in all of Canada. Strict controls are set in place to protect all of their clients.
- Rate discretion: If you are known to do a lot of repeat business with the bank or have a big mortgage, then RBC will provide competitive rates.
- Convenience: RBC mortgage specialists go above and beyond to meet your needs. Many of them will meet you at your home, and sometimes even a coffee shop. They can also be accessed from anywhere that has an online connection.
- Branch access: With over 1,200 branches, you will never be too far away if you need to talk to someone regarding your mortgage.
Cons Of RBC
Getting a mortgage through RBC may also potentially have some downsides:
- Rates may potentially be higher: The funding costs with RBC are fairly low, but its brand is what enables it to charge a premium.
- Fixed penalties may be higher: You can suffer an IRD (Interest Rate Differential) penalty if you end your RBC mortgage early. One of the drawbacks of a big bank mortgage is the notoriously high penalty for IRD. That’s because they are based on the bank’s very high posted rates. (Note: This pertains only to 5 year fixed mortgage rates rbc.)
- Less choice: The bank only sells RBC mortgages that are not exactly the best products for most Canadians. For example, one of the most restrictive prepayment options in Canada is the 10 percent once-annual lump-sum prepayment option that is offered by RBC. For a similar or better rate you will often find more affordable mortgages elsewhere.
- Limited advice: Because RBC reps sell only RBC mortgage products (at least in the case of prime mortgages), this means that the bank does not usually make comparisons with other lenders critically and in detail. In turn, telling you when another lender has a better product to suit your needs is not something they will get paid for, so in most cases, they won’t do it. In contrast, unlike many other brokers, bank reps are not required to ensure that their mortgages are best suited to your needs in comparison to the offerings of other lenders.
- Home Protector Insurance is restrictive: RBC mortgage insurance is comparable to most credit life insurance that other big banks will offer. In the case that you want to change lenders to get a better deal, then it will most likely require you to pay higher premiums just to stay insured because credit life mortgage insurance is based on the condition of your health as well as your age.
RBC Mortgage Calculators
Like most of the big banks, RBC has a number of mortgage calculators that, among other things, calculates payments, mortgage affordability, and prepayment penalties. RBC’s Home Value Estimator is one of the many favourites out of them. In order to predict your property value, it uses public records and recent sales in your area. The value range is reasonably accurate in most housing markets.
RBC’s Prime Rate
In addition to many of the other Big 6 Banks, RBC sets Canada’s benchmark prime rate. When the Bank of Canada changes its overnight rate, then RBC will alter its benchmark prime rate based on that. RBC is known as the leader in setting the country’s prime rate. Other lenders will usually follow suit after RBC.
- Branches: 1,209
- Mortgage portfolio: As of the first quarter of 2018, RBC bank’s mortgage portfolio has more than $258 billion in residential loans.
- RBC serves all the provinces in Canada and serves over 35 countries throughout the world.
Want to see other rates? Check out TD Mortgage Rates Here.