Market and Mortgage News - Week of August 29th, 2011 - Edmonton & Calgary


First Foundation’s Best Rates to Open the Week:

Term Rates
1 Year 2.64%
2 Year 2.99%
3 Year 3.09%
4 Year 3.09%
5 Year 3.39%
7 Year 4.69%
10 Year 4.89%

ARM / Variable 2.43%
Line of Credit 3.50%

Prime Rate 3.00%
Qualifying Rate 5.39%

Market News

Toronto’s main stock index rallied for a fourth straight day on Tuesday, reaching its
strongest point in nearly two weeks, as rising commodity prices propelled resource-based shares higher.

The Toronto Stock Exchange’s S&P/TSX composite index closed up 129.86 points, or 1.04 percent, at 12,634.71. It touched a session high of 12,664.72, its strongest since Aug. 17.

Mortgage News

Most lenders have now reduced or are about to reduce, the variable rate discounts. Discounts were as low at prime – .90% up to last week but have now been reduced to prime -.57%, putting the rate at 2.43%, for the moment.

Why should this matter to you?

It’s certainly unfortunate that we’ve lost the big discounts on the variable rate products – the move has put the fixed rate back on top for the “best deal going” award.

Prime would only have to jump from it’s current 3.00% to 4.00% to make the variable rate look bad compared to the current fixed rate offering. The 1% jump would put the variable rate at 3.43% which is higher than our current best five year fixed at 3.39%. Savings could be had while prime stays at 3.00%, probably into late 2012, but variable rate holders may be forced to lock into a fixed rate a goof bit higher than what they could obtain now, making the overall savings negligible.

On the flip side, the four year fixed rate is a terrific deal at 3.09% and can be a great term to choose as studies show that most people make a move or refinance every four years.

Not sure which type of rate is best for you? Don’t stress it – contact our experienced mortgage brokers today to help you find the perfect fit for you financial goals.

As the company’s first employee, Jennifer has been a Licensed Mortgage Associate since 2004, but her current role is not focused on mortgages. She is the resident blog writer and…

Learn more about Jennifer Rochford