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I just received an ad from my bank offering me a home equity line of credit at prime + 0.5%, a variable-rate loan.

Now, I don't need the loan. But I'm curious. Is prime + 0.5% the best I can do? My credit rating is excellent. Equifax, a Canadian credit rating agency, puts my rating well above 800. I have plenty of equity in my home, plenty of investments, and plenty of savings.

So, is prime + 0.5% the best the bank is likely to offer me? Or is this something banks allow to be negotiated? If so, is prime + 0% a reasonable lower-bound?

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I have a HELOC in the US (I do see that you tagged Canada, but believe the question has broader interest). It started at Prime, $100K. Some years into it, I happened to be at the bank, making a payment, and the teller asked me if I would like to hear about an offer. Sure. Manager brings me into the office and presents an offer of Prime-1.5% if I bumped the line to $200K. The catch was I had to accept $50K off the line immediately. I took the deal, and put the money back the next day. About $5 in interest. The minimum actual rate is 2.5%, so at today's US prime of 3.25%, the prime can go to 4% and only above that will my rate go up. My only regret is that these HELOCs have a limited draw period, 15 years, and mine has just 5 years left.

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  • Thanks for your answer. That's quite interesting, and definitely makes it clear that rates of prime or below are (at least occasionally) available.
    – ChrisInEdmonton
    Apr 15, 2014 at 17:53

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