Wednesday, 2 December 2015

RBC Posts Record Profits...

Congratulations(I think...) to one of Canada's largest financial institutions(I won't name names here...) on achieving "Record Profits" in 2015!

Considering this has been a particularly uncertain year economically, they've somehow managed to buck the trend and keep right on growing. It's no surprise given their aggressive marketing tactics and their STEEP incentives(Read: IRD calculation HERE) to retain loyal customers. In their defense, they also have an extremely diverse portfolio of businesses and assets to manage, which allows them to minimize their exposure and risk to the more volatile markets in Canada.

Now I'm not going to dumb this dialogue down to "We are getting ripped off by the banks" as @UncommonSenses so eloquently put it in the CBC News comments section, but is it not worth considering that if your bank is posting record profits then are they really your best deal?

As one of the major players in consumer finances and mortgages, this bank plays a role in setting the standards and should act as healthy competition to the other banks, credit unions, and lenders. This role is particularly crucial given their massive marketing power, and their influence over their existing clients. I keep track of their mortgage offers quite closely and while on the surface they may seem to provide competitive rates, there is always a dark side(Star Wars pun intended, 18 days to go!).

A great discussion of the drawbacks of a mortgage with the larger institutions can be found in This Article. What you need to know is that although the rates might be competitive, the terms and penalties are most likely not. And with a large number of homeowners considering moving or refinancing within their original mortgage term, the reality is that you need to consider the penalties. This could mean the difference of thousands or even tens of thousands of dollars later.

When you're ready to discuss whether or not your bank is a good fit for your mortgage, take Yoda's advice and give me a call. Let's start the discussion. Or visit my website today to fill out a secure online mortgage application to get started right now. There are plenty of alternatives to consider that will save you money!

Share This Article
Follow Us

3 comments:

Post a Comment