First Foundation Best Rates to Open the Week:
1 Year 2.89%
2 Year 2.89%
3 Year 2.89%
4 Year 2.99%
5 Year 3.19%
7 Year 3.99%
10 Year 3.89%
ARM / Variable 2.90%
Line of Credit 3.50%
Prime Rate 3.00%
Qualifying Rate 5.29%
The Toronto stock market was slightly higher Monday as traders took in stride a downgrade of nine eurozone countries by Standard & Poor’s rating agency and Greece’s difficulties in thrashing out a deal with private creditors.
Nine European countries saw their S&P credit ratings reduced on Friday. Among them, France and Austria lost their “AAA” standing, Italy dropped two notches to BBB+ and Spain to an A rating.
The S&P/TSX composite index rose 24.29 points to 12,255.35 while the TSX Venture Exchange was 2.7 points higher at 1,538.73.
Mortgage rates hit an historical low last week when the Bank of Montreal dropped their five year fixed rate to 2.99%.
While fantastic, these record busting rates often come with restrictions and this BMO mortgage is no exception. Once this mortgage has closed you are only able to break this mortgage via a bonafide sale of the property or by refinancing into another BMO mortgage, leaving you tied to this lender for the full five years ( or longer if you do refinance).
On average, most homeowners make a change to their mortgage at the three or four year mark and this is what BMO is banking on, pun intended. They know there is an excellent chance that rates will be much higher in three or four years and if you take this mortgage now, you will be at their mercy at that point, having given up the benefit and leverage of shopping around.
That’s not to say this mortgage isn’t good for the right person or situation, it’s just important to remember to always view your mortgage as a product you are purchasing – consider it’s features, it’s pros and cons and compare them against your long term financial plan before selecting one.
If that sounds daunting, never fear, you can always rely on the experience of First Foundation’s knowledgeable mortgage brokers to help you do some comparisons for you. Give us a call today or complete our handy and secure online mortgage application.
In the meantime, consider the Four Year Fixed mortgage rate First Foundation has on offer – you get the same great rate of 2.99% with the ability to shop around at renewal or when refinancing AND save on penalties if you do make a change at that typical four year mark.