Superior Flex Line
Have you built up some equity in your home and wish you had the cash to do some renovations, buy an investment or catch up on your unused RRSP contributions? After all, an extra few thousand dollars invested in your RRSP now can make a big difference later on when you retire. The Superior Flex Line can put a minimum of $25,000 or more in your pocket to spend as you wish.
Get the Money You Need, When You Need It
The Superior Flex Line makes borrowing quick and convenient. You can access your funds several different ways, without having to make a trip to the branch or having to fill out a form every time you need additional funds. Plus you get a very attractive interest rate.
Maximize Your RRSP Contribution
With your Superior Flex Line, you can make your maximum RRSP contribution and even catch up on unused contribution room.
The net interest you pay on your borrowing is negligible when you consider the interest compounding on your RRSP contribution!
Let's say your home is worth $170,000, and the status of your mortgage loan is as follows:
|Mortagage loan balance||$80,000||8.25%||$1,000|
Over one year, you pay $6,400 in interest charges, and over 10 years you pay $37,000. But you have another option: use the value of your home ($170,000) to borrow up to 75% of what it is worth, which in our example would be $127,500.
This way, you save on loan charges and can access the funds you need to catch up on your unused RRSP contribution room. It's an option well worth considering when you compare the preferred rate on your Superior Flex Line and the return on an RRSP.
By integrating all your borrowing into a single Superior Flex Line account, you can take full advantage of its flexibility, and much more.
|Total borrowing capacity||$127,500|
|Mortgage loan balance||$80,000|
|RRSP contribution (RRSP loan at 9$*)||$40,000|
|Total loan (at a rate of 7.5%)||$120,000|
*Example based on total repayment over 10 years. Tax refunds are reinvested in an RRSP and the annual nominal yield is 9%. Amounts have been rounded off. The rates of 9% and 7.5% may vary depending on market trends.
In 10 years, at a rate of 7.5%, you will have paid the following in interest:
- On the $40,000 amount: $16,690
- On the $80,000 amount: $33,785 instead of $37,000.
In total, you will have paid $50,475 in interest while paying off all your loans. In the end, your investment will be worth $204,710 if you reinvest all your income tax refunds in an RRSP at 9% interest. This is equal to a gross yield of $154,265 on an initial investment of $40,000.
What's In It for You
- Save, since you are exempt from most account fees (except for transactions at the counter).
- Get an even better variable rate because of the collateral mortgage and your credit record.
Choose additional Protection
If you wish, you can add loan insurance (life, disability, critical illness insurance) to your Superior flex line. For your convenience, the premiums are deducted automatically from your account.