How to Guarantee Your Interest Rate Until May 2016


Great Rates

Rates Are Going Up! I'm Not Ready to Buy a Home Just Yet!

What Does That Mean For Me?

Are you thinking about buying a home this spring? Did you know that many Canadian banks, like Royal Bank of Canada, just raised their mortgage rates effective this Friday? What if you're not ready to buy just yet - are you doomed to higher rates for the next five years of your life?

The answer is no. Not if you get a mortgage pre-approval from First Foundation before rates rise with all lenders. When you get a real pre-approval - not just a "pre-qualification" as many banks like to call them - an underwriter reviews your application along with us - the mortgage brokers - and gives you a list of conditions you'll need to satisfy in order to qualify for a mortgage and a 120 day rate hold. This rate hold protects you against rising interest rates for at least the next 120 days. As of today's date, that will take you until May 6, 2016. I know because I just got a client pre-approved today.

Why is a Real Pre-approval Important?

  • A thorough review by a Mortgage Broker and underwriter helps to avoid disappointing surprises when you're actually ready to buy.
  • REALTORS (R) are more likely to spend quality time with you if they know you are actually pre-approved.
  • Your interest rate is protected for up to 120 days or more.
  • You know how much you qualify for with certainty.
  • If rates go down, instead of up, during the rate hold period, you often are able to get the locked-in interest rate reduced with the help of your broker.
  • If rates are lower once you're ready to make an offer, you still have flexibility to get the new, lower rate.
  • Even a savings of 10, 20, or 30 basis points (bps) on an average mortgage can save you thousands of dollars over a typical five-year mortgage term.
  • Pre-approvals are free and no commitment is necessary, so why not?

If One Bank Raised Their Rates, Haven't They All Gone Up?

No, not necessarily. While interest rates with the big five Canadian banks often move much like gas prices at the big three or four gas stations, the Canadian mortgage marketplace offers many competitive lenders, through brokers, to ensure savings for Canadians. While the banks may have increased their rates already, many of First Foundation's lender partners have rates as low as 2.64% for a 5 year fixed - which is almost half a percent better than RBC's offering. A 120 rate hold pre-approval can be had for as low as 2.79%, or lower if you're planning to borrow more than $500,000. Check today's lowest mortgage rates here.

Ok, so I definitely want to buy this spring and I don't want to get hosed with a higher rate...what do I do now?

Easy! Contact your friendly First Foundation mortgage broker or get started with our easy online mortgage application, and we'll call you once we've received it.

President of First Foundation Residential Mortgages and First Foundation Insurance. Live in Edmonton but cheer for the Riders. I have lots of kids. Follow me on Twitter @gordmccallum

Learn more about Gordon McCallum