Neighbor News
RBC Bank Helps Canadians Make their Money Work Harder in the U.S. with Canadian Dollar at 13-Year Low
With cross-border travelers face higher costs, RBC Bank is providing solutions
RALEIGH, N.C. (April 1, 2016) – Spending time in the U.S. costs Canadians more these days with the value of the Canadian dollar hitting a 13-year low. Cross-border travelers and snowbirds face higher expenses for everything from groceries to rent due to an unfavorable exchange rate. However, RBC Bank – the leading provider of banking solutions for Canadians visiting or staying longer-term in the United States – is sharing tips to help Canadians make the most of their money.
Here are a few expert tips for snowbirds:
· Make Sure You Get the Best Exchange Rate: Instead of exchanging money several times throughout your visit to the U.S., exchange your money in one lump sum. The more money you exchange, the lower the exchange rate you will generally pay. Learn more.
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· Refinance your home and take advantage of the strong U.S. dollar: Many Canadians bought their U.S. home between 2009 and 2013 when the Canadian dollar (CAD) was at or around parity with the U.S. dollar (USD). Over the years, these same homes have appreciated. Canadians who are U.S. homeowners in popular snowbird markets are in a unique and favorable position to take advantage of their property’s appreciation and the strong U.S. dollar. By refinancing, Canadians can take the surplus earned on the currency exchange, and use it to repay debts or make new investments back in Canada. If the money is kept in USD, they can spend it on renovations to their U.S. home or put it in a high-interest savings account in the U.S. where it will earn more than in Canada and remain FDIC-insured.
· Buy, Don’t Rent: Peak season rent is expensive in popular snowbird hotspots, but property values are still affordable– particularly compared to similar housing in Canada. For example, renting a condo in Phoenix might cost $3,000 in monthly rent during peak season. However, the monthly mortgage payment to purchase the same property would be only $900. Plus, while rent payments continue to climb each year, monthly mortgage payments stay consistent. And, renting the property while not using it provides a way for Canadians to cover their mortgage, homeowners’ association fees and property tax. Learn more.
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· Finance Your U.S. Property: Consider a U.S. mortgage instead of buying your home with all-cash. By applying for an adjustable rate mortgage with a fixed term, Canadians can avoid the one-time cost of currency exchange in a large amount now and potentially pay off their mortgage without any prepayment penalties if the Canadian dollar improves. Learn more.
· Save money on U.S. Purchases with a U.S. Credit Card: With a U.S. credit card, Canadians can save foreign transaction fees on purchases made in the U.S. Plus, valuable benefits such as travel insurance are available on some cards like RBC Bank’s Signature Black Visa, providing important protection at no cost.
“When buying a $200,000 home in all cash, with the current exchange rate, Canadians will end up spending an extra $66,000,” said Alain Forget, director of business development at RBC Bank. “When Canadians finance through RBC Bank, they are exchanging less money up front, which can mean tens of thousands of dollars in savings.”
RBC Bank helps Canadians spend time in the U.S. by offering tailored mortgage solutions and making it easier for clients to access, manage and transfer funds when they make the trip down south. To learn more about the U.S. mortgage process, visit RBC Bank’s Advice Center.
About RBC Bank
RBC Bank (Georgia), N.A., a wholly-owned subsidiary of the Royal Bank of Canada, provides U.S. banking solutions to RBC consumer clients with a cross-border lifestyle, including snowbirds, expats, student, businesses and more. RBC Bank pioneered cross border banking and has been serving clients who visit, shop, study or relocate in the U.S. for more than ten years. Today, the Bank provides everyday banking, business banking and real estate lending solutions in all 50 states. For more information, visit www.rbcbank.com.
Equal Housing Lender. Member FDIC.
About RBC Royal Bank
Royal Bank of Canada is Canada’s largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America’s leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We employ approximately 79,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 38 other countries. For more information, please visit rbc.com.
RBC supports a broad range of community initiatives through donations, sponsorships and employee volunteer activities. In 2014, we contributed more than $111 million to causes worldwide, including donations and community investments of more than $76 million and $35 million in sponsorships.
