BMO is dead-set on winning mind share among consumers.
It’s coming back to the market with two new deep-discount rate promos:
- A 5-year fixed at 2.99%
(which starts Thursday, March 8, 2012)
- A 10-year fixed at 3.99%
(which starts Sunday, March 11, 2012)
Both of these specials are low-frills, meaning:
- A Lower Maximum Amortization: 25 years versus 30-40 years elsewhere
- Less Lump-sum Pre-payment Ability: 10% maximum per year (i.e., 1/2 of the 20% that BMO normally allows)
- A Smaller Payment Increase Option: Up to 10%, once per year (again, 1/2 of the 20% that BMO normally allows)
- A Locked Term: The Low-rate Mortgage is fully closed unless you sell the property, refinance (with BMO only), or early renew into another BMO mortgage. In other words, unless you sell, you’re not leaving BMO for 5 years, like it or not.
Both the 5-year and 10-year promos run for 3 weeks, until March 28, 2012.
Its good business for mortgage brokers like me, our rates are still fully featured and better priced, although you may think RATE is everything.. be careful with that thought… its not always about the rate, although important, remember its about someone managing your mortgage long term, and showing and teaching you strategies to prepare you for rising interest rates which are inevitable in the future and saving YOU money over the long term
HERES THE ARTICLE BELOW;
The Bank of Montreal has again cut its 5-year mortgage rate to 2.99 per cent, the second time it has done so this year.
It has also cut the rate of its 10-year mortgage to 3.99 per cent, the lowest any of Canada’s big banks has ever offered on a 10-year mortgage.
This latest rate is available until March 28 and applies to mortgages with a 25-year amortization period.
TD Canada Trust announced a similar move Thursday, again offering a four-year rate at 2.99 per cent.
BMO first offered the 2.99 per cent rate on its five-year mortgages in January before pulling the offer after a few weeks. Some of Canada’s other big banks cut their rates as well to match BMO’s offer. However, BMO was the only to offer the 2.99 per cent rate on a five-year mortgage, whereas other banks offered it for four years.
TD’s latest rate cut echoes the move it made in January.While it matched the rate offered by BMO, one less year could make a significant difference for a prospective home buyer, particularly when it comes time to renew.
Analysts have said fierce competition in the mortgage lending market has driven rates to record lows. However, this has eroded profit margins, forcing banks to look elsewhere for profits.
CIBC recently announced it was looking to sell its mortgage broker business to drive customers into branches and thereby increase profit margins.
While lower rates have been a benefit to home buyers, they have raised concerns among some Canadian policy makers. Bank of Canada governor Mark Carney has spoken about Canadians’ rising appetite for debt, while Finance Minister Jim Flaherty has repeatedly warned Canadians to get their financial houses in order.