First Foundation’s Best Rate to Open the Week:
1 Year 2.64%
2 Year 3.23%
3 Year 3.42%
4 Year 3.49%
5 Year 3.59%
7 Year 4.79%
10 Year 4.99%
ARM / Variable 2.20%
Line of Credit 3.50%
Prime Rate 3.00%
Qualifying Rate 5.49%
Another day of losses on the Toronto Stock Exchange, Monday, pushed markets to the verge of what investors consider full-fledged “correction” territory. The day raised concerns about how stock values will begin to reflect the collection of negatives that have piled on to the markets over the spring from the Japan earthquake to the Libyan oil disrupting rebellion, China’s growth-slowing monetary policies to the impending end of the U.S. Federal Reserve’s monetary stimulus and from Europe’s government debt woes to the stumbling U.S. economy.
The S&P/TSX composite index slumped another 144 points, or 1.1 per cent, to close at 12,939.72 – its first close below 13,000 since November.
Most lenders have now dropped their five-year fixed rates to at least 3.69% or less. First Foundation’s best five-year rate is currently 3.59%.
The qualifying rate, which is used to qualify variable-rate borrowers, dropped to 5.49%.
U.S. Federal Reserve Chairman Ben Bernanke made a speech entitled The U.S. Economic Outlook at the International Monetary Conference last Tuesday. He noted that, “there is not much evidence that inflation is becoming broad-based or ingrained in our economy” and there was still, “substantial slack in the U.S. labour and product markets” contributing to the reasons why inflation should “return to more subdued levels over the medium term”, as apposed to the short term.
If Mr. Bernanke’s is correct and the U.S. is set to undergo a prolonged period of low inflation the American influence on the Canadian market should result in continued downward pressure on interest rates.