Types of Mortgagees at RBC
Pre Approval Mortgages
Getting a mortgage pre approval at RBC is one of the most convenient and efficient processes in Ontario, made easier through technology and its branch network. Moreover, they are one of the few banks that can allow an extended rate hold on their pre approval, potentially beyond the standard 120 days. This can make a major difference for those looking to buy a new construction property. A pre-approval can be initiated through one of their branches or directly through an RBC mobile mortgage specialist.
Fixed Rate Mortgages
Fixed rate mortgages at RBC promote a good balance of competitive rates and peace of mind. This is because the monthly or bi weekly mortgage payment does not fluctuate for the mortgage term. Even though the mortgage term may be fixed, plenty of flexibility is still built into the mortgage’s fine print. For example, RBC allows for 15% annual pre payment to pay down the balance faster. In addition, fixed mortgages come with portability features so that the mortgage may not need to be broken if the mortgage is moved.
Variable Rate Mortgages
RBCs variable rate mortgages are among the lowest in Ontario and the country. These mortgages fluctuate with the Bank Prime Rate, which is priced in turn by the Bank of Canada Overnight rate. In other words, when the Bank of Canada adjusts its overnight rate, it affects the Bank Prime Rate, which then affects the RBC variable mortgage rates.
This is especially so for conventional mortgages. Conventional mortgages can be used for purchases with an amortization extended for up 30 years, or refinance mortgage transactions. RBC does not allow for mortgages to extend beyond 30 years. This contrasts some of the competition that has qualified for their variable rate mortgages to extend to negative amortization. RBC does not allow this increasingly controversial measure.
HELOC (HomeLine Plan Mortgages)
The HELOC that can be integrated into RBCs Homeline mortgage plan is one of the most flexible in Canada. This plan allows for an open line of credit combined with the fixed or variable mortgage term. In addition, a borrower may potentially select a fixed and variable mortgage term within the Homeline. The HELOC and Homline plan is available for conventional RBC mortgages only.
CMHC Default Insured Mortgage
The CMHC default insured mortgage is offered at RBC, to those with less than 20% down payment. There is a standard CMHC or default insurance premium involved alongside some of RBCs best mortgage rate specials.
Conventional Mortgage Rates
Conventional mortgage rates apply to the majority of RBC mortgages. Almost all mortgages not CMHC insured (or insured through one of the other mortgage default insurers) are known as conventional. The Bank can potentially be more flexible with conventional mortgages because they do not need to abide by the more restrictive approval policies of the CMHC. For example, a 30 year amortization is allowed on conventional mortgages but not on CMHC default-insured mortgages. In addition, this type of mortgage can be used with a refinance and debt consolidation transaction.