RBC Mortgage Rates
The Royal Bank of Canada is the largest bank in the country based on market capitalization with over 16 million clients globally. Founded in Halifax, Nova Scotia in 1864, today the RBC headquarters are located in Montreal and Toronto. RBC operates in 36 other countries and offers a wide array of banking, investment, retail and commercial banking, capital markets, insurance products, and wealth management services.
RBC Fixed Rate Mortgages
- 1 year fixed mortgage rate - 2.44%
- 2 year fixed mortgage rate - 2.09%
- 3 year fixed mortgage rate - 2.24%
- 4 year fixed mortgage rate - 2.29%
- 5 year fixed mortgage rate - 2.24%
- 7 year fixed mortgage rate - 3.09%
RBC Variable Rate Mortgages
- 5 year variable mortgage rate - 2.22%
Note that the RBC Prime Rate is 2.45%.
RBC offers a product called Homeline which is a home equity line of credit (HELOC). This kind of financial product uses positive equity in your home as security for revolving credit. In order to qualify for RBC Homeline, you must be applying for a mortgage with a 20% down payment or be an existing homeowner with at least 20% positive equity in your property. Currently, the following rates are being offered by RBC for this HELOC:
- 4 year fixed, closed term - 2.29% (2.325 APR)
- 5 year fixed, closed term - 2.39% (2.42% APR)
- 5 year variable, closed term - 1.6% (1.63% APR) *
* Note that the RBC Prime Rate is 2.45%. The variable interest rate is calculated as the RBC Prime Rate less 0.85% which gets you to 1.6%.
RBC Homeline can be used to consolidate debt, pay for homeownership costs or to finance other purchases, such as a new car, vacation or education. This HELOC is unique because borrowers can use the Homeline to split their mortgage between variable and fixed rates. In theory, people who do this have the opportunity to save more on variable rates while reducing your risk with fixed rates.
RBC Mortgage Prepayment Penalty
If your mortgage is closed, prepayment penalties will likely apply if you attempt to pay part or all of the balance early. Mortgages are a contractual obligation and if you make a payment early, you’re violating the contract which is why you could incur a prepayment penalty. Every bank’s prepayment penalty policy and fee varies.
You can calculate what your prepayment penalty will be using RBC’s mortgage prepayment calculator. Even though you might incur a fee, it could still be worth the penalty which is why it’s important to understand the cost.
How to Get a RBC Mortgage Pre-Approval
Mortgage pre-approval is helpful because you can shop for homes with a confirmed amount in mind. RBC makes it clear that mortgage pre-approval is not the same as pre-qualification. Mortgage pre-qualification is a quick and easy process where very basic information is considered. However, pre-qualification isn’t a guaranteed loan.
On the other hand, mortgage pre-approval involves more steps, such as credit checks and financial verification. If you’re pre-approved, the lender is making a real commitment to loan you money. There isn’t a guarantee that you’ll receive the mortgage, but a specific rate and amount is offered for a certain period of time.
In order to get pre-approved with RBC, you will need to provide some personal and financial information. It can help working alongside a RBC mortgage specialist.
How to Get a RBC Mortgage
In order to qualify for a RBC mortgage, you usually need to meet the following criteria:
- Have good credit
- Have steady, reliable income, usually from full-time employment
- Be a resident of Canada with a valid Canadian address
- Be the age of majority in your province or territory
As with the pre-approval process, RBC will request personal and financial information before extending a mortgage. Getting approved by any of the big banks in Canada can be challenging, RBC is no exception. This is particularly true if you have an unconventional financial situation. Before applying, do what you can to improve your credit and financial position to better your odds of approval.
Using RBC Mortgage Specialists
The process of applying for a mortgage can be tough to navigate on your own. RBC has a team of mortgage specialists to help you through the application and buying process. If you’d prefer to have someone assist you through your RBC mortgage, you can connect with a mortgage specialist near you.
- Pre-qualification and pre-approval. RBC allows you to obtain a preliminary mortgage offer while you determine your financing options and begin home shopping.
- Other services. By being a RBC client, you can access other services including financial products and advice.
- RBC is one of the best banks in Canada. Working alongside them will give you confidence about your financing decision.
- Strict qualification criteria. If you don’t meet the ideal borrower mold, it can be challenging to qualify for a mortgage with RBC. Specifically, if you have unstable income or bad or no credit.
- Competitive rates are exclusive. RBC sometimes offers competitive or special rates, but they’re usually reserved for individuals that perform a high volume of banking.
- Higher early repayment penalties. If you break a mortgage early with RBC, you might incur an IRD penalty (Interest Rate Differential). These fees are widely known to be extremely costly.
What are the different kinds of rates?
Banks offer different kinds of rates for mortgages. All of Canada’s big banks usually offer three types of rates: inflated rates used for reference, contracts and penalties; rates they post online or advertise to customers as special or limited time offers; and rates they keep quiet about but are the best rates, normally these are negotiated.
Posted rates are the rates used to determine penalty fees. As a result, these rates are inflated to get banks more money. No one should be paying posted rates on a mortgage. They are used for reference and customers can negotiate or seek out better advertised rates from there.
Special Mortgage Rates
Special mortgage rates are the rates normally offered online or in advertisements as a limited time deal. They are not limited time deals or special in any way. They are lower than posted rates and generally what mortgage specialists can outright offer clients. However, smaller lenders and credit unions generally offer more competitive rates than the big banks’ special rates. Seeking out comparable loans and their rates can put you in a position to ask for even better rates than what big banks offer you as “special”.
Discretionary rates are the good deals big banks can offer, but won’t openly tell clients about or advertise publicly. Banks will offer these rates to preferred clients, because they don’t want to lose their business. Ultimately, banks want business and any client, preferred or not, can negotiate rates down into the discretionary category.