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What is an investment loan?
An ideal option to boost the potential growth of your investments.
An investment loan allows you to increase your investment capacity, thus creating leverage that maximizes your potential returns on investment while allowing you to maintain your liquidity for other projects.
In addition to boosting investment profitability, this type of loan can be part of a tax-advantaged financial strategy since the loan interest can be tax deductible.
It could be the perfect solution for investors who have high risk tolerance who want to increase the value of a portfolio.
Main benefits of an investment loan
- Allows you to take advantage of market upturns
- Maximizes your investments while maintaining access to your liquidity
- Helps diversify your investment portfolio
- Can allow you to leverage interest expense deductibility
- Offers increased investment capacity and may provide access to reduced fees through Prestige preferential pricing
- Provides access to segregated fund benefits
Investment loan interest rates
The rates shown are determined based on the Royal Bank of Canada’s prime rate (PR), which is currently at 4.95%. Interest rates are provided for information purposes only and are subject to change at any time without notice.
Investment loan interest rates (non-registered assets)
| Loan amount | 100% loan Interest rate | 1:1 loan Interest rate |
|---|---|---|
| $10,000 to $49,999 | PR + 1.25% | PR + 0.75% |
| $50,000 to $99,999 | PR + 1.00% | PR + 0.75% |
| $100,000 to $300,000 | PR + 0.75% | PR + 0.75% |
Additional information
Eligibility
A few criteria are taken into account to verify eligibility for an investment loan.
- Stable income of over $65,000 per year
- Subject to credit approval
- Solid investment knowledge
- “Moderate” to “high” risk tolerance, depending on investor profile
Repayment options
Repayments are made by pre-authorized debit (PAD) on a monthly basis.
You have two options:
- Repayment of interest only: PAD payments vary based on the interest rate in effect and correspond to the interest accrued on the loan for the previous month.
- Repayment of principal and interest: PAD payments include repayment of both the principal and interest. They vary based on the interest rate in effect and the amortization period chosen (5 to 20 years).