Case in point is B2B Bank. Today it chopped its HELOC rate to prime + 0.25%. That equals the lowest nationally available non-promotional HELOC rate in years.
- Most national lenders are currently at prime + 0.50%
- Uncompetitive national lenders are at prime + 1.00% and up
- CIBC has a short-term introductory rate of prime (but it only applies for 9 months; then it increases)
- National Bank has prime rate for engineers
- A few regional credit unions are at prime + 0.25%
B2B’s pricing improvement isn’t just a one-bank story. It is symbolically important. It signifies that funding costs (spreads) on higher-risk financing are almost back to “normal.”
It also shows that the HELOC market is getting increasingly competitive, which leaves us optimistic that we’ll someday see prime rate on HELOCs once again.