These good credit client residential rates are subject to change at any time without notice. Contact our office for current rates.

Rate Rationale:
The Prime Rate is the lowest rate that banks and mortgage companies or “lenders”, charge their customers. When the prime rate changes, it not only affects Variable rates but also changes Fixed rates (Column 2 on the chart). Within a short period of time when the Prime Rate increases, the Fixed Rate will also rise. On December 6, 2005 the Prime Rate increased to 5.00% and is expected to rise again in 2006. Predictions for the 2006 increase include a range between 5.5% to a high of 6.0% by year end.

Considerations – Why is this important to the consumer?
Due to the increase in the prime rate on Dec 6, 2005 we can expect Fixed Rates to increase. Why is this important? The reason is that as the prime rate continues to rise, at some point in time the choice to lock-in to a fixed rate mortgage will be safer than risking a potential large increase in the unpredictable variable rate. As shown in the above chart a 5 Year fixed term is 4.87% (Column 2), with monthly payments staying the same. The current Prime Rate is 5.00%. If Variable rates increase in 2006 from 5.00% to 5.55% or 6.00%, how high will the Fixed term rates be? If you are not a risk taker or cannot afford the increases in monthly payments at that time, maybe you should consider a fixed term now or soon.