Line of Credit interest rate reduced!

Think of the money I can spend on new perennials when I'm not paying the bank interest!

It seemed to take months, but CIBC has finally reduced the interest rate on my LoC from 7.5% to 6%. This is awesome news.

The branch manager said this is the “best I can do right now” and indicated that in the future perhaps they could “do better”. Not sure if this is due to my credit score, or if it’s just the state of the banking union. Either way, I’ll continue to pursue the lowest possible rate. Not that I plan on having a balance in my LoC in the future, but why not keep negotiating for the best possible rate?

The branch is crediting my LoC account with the interest due on the 12K they asked me to loan myself when I transferred the mortgage from the rental property. I’m not actually out any funds month to month on this weird switcheroo deal.

All these little things add up to savings. I’m thankful not to pay any more in interest than I have to.


3 responses to this post.

  1. MCM, what do they base the LOC rates on? Mine is at 4.25% now I think, I’m not sure because I haven’t used it in forever – I’m with RBC. I know that when I went and re-did my mortgage with TD last year, they were pushing an LOC on me at 3.25%, but I had to explain to her for 1/2 an hour that I didn’t need one.
    I do think it’s nice to have that room there at a low rate just in case something happened or you have to do something like I’ve used my LOC for in the past (bridge an RRSP contribution with a bonus or tax refund).


    • Hey Jacq,

      I’m not sure what it’s based on. It’s a question I didn’t ask, but I will. They did do a credit check, but having done one recently on myself, I know my credit score is pretty good. My mother has a LoC rate that’s about what you pay too, and I would suspect she has an awesome credit rating.

      The issue that may be affecting me is I have two mortgages, and they add up to a pretty big sum when you look at it all in one place (principle residence, rental property). So I may be in a riskier zone than some of their clients, despite my good credit rating.

      I will ask and find out though – good question!


  2. Awesome, any littlebit helps! Good for you for pursuing a lower interest rate!


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