UBC will require faculty to pay annual interest at the Canada Revenue Agency (CRA) prescribed interest rate (March 2017: 1%) so that no taxable benefit will be received by the individual faculty member. The loan principal would be due on the 15th anniversary of the date the funds were advanced to the faculty member. Should the faculty member wish to re-pay the loan earlier than the due date, payment must be received two weeks prior to the anniversary date of the loan, partial payment(s) of less than $5000 will not be accepted and any amounts over $5000 must be in $1000 increments. The repayment will be credited on the loan anniversary date if received two weeks prior to the anniversary date. Property purchased with any PIRL loan can be resold to anyone without restriction. Faculty members may make repayments without any penalties.
Annual Interest on the PIRL will be set at the CRA prescribed rate at the time the money is advanced (in March 2017 it was 1%). This is the “Initial Interest Rate” that will be charged on the loan for the first 5 years. However, because the CRA reviews the prescribed rate on a quarterly basis, it is possible for the prescribed rate to change during the first five years. If:
- The CRA prescribed interest rate increases above the Initial Interest Rate, UBC will continue to charge the Initial Interest Rate.
- If the CRA prescribed rate decreases below the initial Interest Rate, UBC will change the newer lower interest rate.
At the end of five years, the Initial Interest Rate prescribed rate will be reset to the then applicable prescribed rate as determined by CRA. This reset interest rate will then apply for another 5 year period, with adjustments as set out above.