First Foundation’s Best Mortgage Rates to Open the Week:
1 Year 2.64%
2 Year 3.20%
3 Year 3.35%
4 Year 3.89%
5 Year 3.84%
7 Year 4.94%
10 Year 5.15%
ARM / Variable 2.20%
Line of Credit 3.50%
Qualifying Rate 5.44%
Prime Rate 3.00%
Toronto’s main stock index fell sharply on Monday, retreating from a near three-year high on fears that rising oil prices and instability in North Africa and the Middle East would damage the global economic recovery.
The index’s energy sector ended down 1.5 percent, backing away from an early rally, as increasing violence in Libya and rumors that leader Muammar Gaddafi was seeking an exit deal contributed to a volatile day for oil prices.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 160.42 points, or 1.13 percent, at 14,092.35. Earlier in the session, it rose as high as 14,329.49, its highest level since July 2008.
From an article on Bloomberg Business Week:
The difference between yields on Canada’s five-year government bonds and mortgage rates offered by the nation’s banks has narrowed to about the least in four years as lenders absorb higher borrowing costs to try to increase their share of the country’s surging mortgage market.
The spread between bond yields and the Bank of Canada’s index of five-year conventional mortgage rates shrank to 2.68 percentage points on March 4, from a recent high of about 5.15 in January 2009, according to data compiled by Bloomberg. The current spread means borrowers are paying about one-half of a percentage point less on a five-year fixed mortgage rate than they would otherwise if the gap was at its average.
The tighter spreads reflects the health of Canada’s housing and mortgage market, prompting lenders including Royal Bank of Canada and Toronto-Dominion Bank to say that consumer banking margins are tightening due to increased competition. Mortgage credit rose 7 percent in 2010 in Canada, where house prices now exceed their pre-recession peak, unlike in the U.S., where prices remain depressed from 2008.
“When everyone’s trying to compete for the same loan, that compresses margins within the banks,” said Craig Fehr, a bank analyst at Edward Jones & Co. in St. Louis. “Add to that the fact that rates are very low, so if you’re not earning much on the spread side of the business, you try to make it up in volumes.”
IMPORTANT! Apply by this Friday, March 11th, if you require a 35yr amortization or a 90% Loan to Value refinance. An approval for these mortgages needs to be obtained by Mar. 17th and lenders may be very busy next week dealing with last minute applications. Contact one of our licensed mortgage brokers today if you think you may need either of these mortgage products.