Market and Mortgage News - Week of Apr. 04, 2011 - Edmonton & Calgary


First Foundation’s Best Rates to Open the Week:

Term Rates
1 Year 2.64%
2 Year 3.20%
3 Year 3.35%
4 Year 3.64%
5 Year 3.74%
7 Year 4.79%
10 Year 4.99%

ARM / Variable 2.20%
Line of Credit 3.25%

Prime Rate 3.00%
Qualifying Rate 5.34%

Market News

The Toronto stock market closed higher on major dealmaking in the mining sector while energy stocks advanced as crude oil rose to a fresh two-and-a-half year high.

The S&P/TSX composite index gained 88.2 points to 14,218.35 while the Canadian dollar was down 0.33 of a cent to 103.36 cents US.

According to an article in the Calgary Herald, the week ahead should bring further signs of a deepening economic recovery as job creation is likely to return to a healthy clip and business confidence is expected to rise.

On Monday, the Bank of Canada’s first-quarter Business Outlook Survey is expected to show growing optimism among business leaders, with the balance of opinion for future sales rising to a reading of 27 from the previous quarter’s 22.

“The first quarter survey was conducted up until mid-March, with the tail end just catching Japan’s crises and the unrest in Libya, but also capturing the market upswing in the U.S. outlook,” said BMO Capital Markets deputy chief economist Douglas Porter.

“Even before the U.S. recovery was on a firmer footing, Canadian business was positive on future sales, capital spending and hiring plans. If the bank’s surveys are uniform in their message that the recovery is deepening and broadening, it could bring forward the market’s view of when the rate hikes will resume,” Porter added.

“Employment in the private sector is expected to have led the rebound,” said David Tulk, chief Canada macro strategist for TD Securities. “Public sector hiring should also benefit from the leading edge of a temporary hiring program related to the census.”

The housing market may contribute to the upbeat mood with an uptick in the value of building permits. Statistics Canada is expected Thursday to report a rise of 1.4 per cent in February after falling 5.1 per cent the month before.

Friday’s housing starts from Canada Mortgage and Housing Corp. are forecast to ring in at an annualized pace of 183,500 units for March, compared with 181,900 the month before.

Mortgage News

Several of Canada’s big banks are raising most of their fixed-term mortgage rates(Fixed-Term Mortgage Rates) ahead of the busy spring real estate market. Some lenders are increasing their 1 – 5 yr terms as much as 35 basis points. Fixed mortgage rates, which are closely tied to the bond market, tend to climb when traders shift investment activity to riskier equity assets from bonds, which are considered safer.

With fixed rates on the rise, the qualifying rate should increase to 5.69% next Monday, April 11, 2011, making it a little harder to qualify for a variable rate mortgage and all terms other than the 5 year fixed term.

Most of the major banks will be raising their rates as of midnight, Tuesday, April 5th but many of our non-bank lenders have yet to increase theirs. If you think you will be purchasing a home in the next 90 to 120 days, it would be wise to contact one of our licensed mortgage brokers immediately to lock in a fixed rate with a pre-approval (Mortgage Preapproval).

And don’t forget, you can always complete our online mortgage application and we will make every effort to follow up with you by the next business day.

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