If you’re a typical member, you’ll have a variety of accounts with us — some with positive balances (chequing and savings accounts, for example), and some with negative balances (any kind of loan, including mortgages, consumer or auto loans, lines of credit and so on). Each loan is handled in isolation from your other accounts, and each has its own payback terms and rate of interest.
Dream One brings all your accounts * together under one umbrella, effectively leaving you with a single overall balance – all your debt, less all the money you have on deposit at any given time. Your ‘balance owing’ – the amount of money you pay interest on — will fluctuate day-by-day, with every transaction you conduct. Overall, though, it will be less than before, because the amount you owe has been ‘reduced’ to reflect the funds you have on deposit.
* Excluding registered accounts (RRSPs, RESPs, RRIFs) and Tax-Free Savings Accounts (TFSAs)
Interest rates charged for borrowing can vary quite a bit, depending on the type and term of the loan, market conditions at the time it was opened, whether the rate is fixed or variable, and other factors. Rates for consumer and auto loans are typically a little higher, while mortgages – because they’re backed by significant collateral (your house) – will usually be comparatively lower.
Under the Dream One model, though, you’ll pay the same rate of interest on your entire balance owing – and, overall, it will be lower than what you’re paying now… it could even be lower than your current mortgage!