BMO
Bank of Montreal: 5-Year Fixed Rate Mortgage at 2.99% And 10-Year Fixed Rate Mortgage at 3.99%
This deal has expired!
BMO's record-low 2.99% 5-year fixed rate mortgage is back! If you missed out last time, here's your chance to lock in the lowest 5-year rate from a major bank in Canadian history! Thanks forum poster mwun for the heads up!
The prepayment limitations are no different than what was stipulated last time when the offer was introduced in January: you're allowed 10+10 prepayment privileges and you're allowed to repay your mortgage in full before maturity as long as your property is sold to an unrelated purchaser at fair market value or your mortgage is refinanced into another BMO mortgage product.
If you want a little more prepayment flexibility, BMO also offers a 10-year fixed rate mortgage at 3.99% in which you can pay off your mortgage without restriction in the final 5 years of the term, however, prepayment charges will apply.
The deadline to apply for the 5-year and 10-year low rate closed mortgage is March 28. Learn more about these limited time offers at BMO.com or explore more mortgage options using our RedFlagDeals.com mortgage rate comparison tool.
Comments
Add your comment
Login or join the 450,000+ who have registered for their free account.
Connect via
I also caught a blurb on the radio that someone is offering 3.98 on a ten year fixed starting today too!
Depending on the restrictions, that is damn tempting for shelter in a rate storm...
Although if you believe that the Bank of Canada and the commercial banks are in bed together (which I do) it also indicated that prime will stay roughly where it is for the next decade or they'd have to eat it on their bond investments, so the savings on a variable over that term on current rates versus the fixed would be huge at today's prices.
Who likes to gamble? My broker said stay variable.
I did.
Personally, but 10-year seems too long for me.'
Also, I was debating whether going for variable or fixed, the best 5-year variable I can find is P-0.35% (i.e. 2.65, with P= 3%) at HSBC. The catch is you have to maintain a $20,000 asset (can be a combo of chequing, saving, TFSA, RRSP, etc) with HSBC or else the rate will bounce back up. They also offer P-0.4%, but the catch is even worse, which is maintain a $100,000 asset.
But on topic, I am happy staying with my variable at prime minus .9 at least for the next few years. It's gambling either way but no matter which way you decide to go you can't really go too wrong right now. But please, don't budget what is affordable to your family when buying a house based on rates staying where they are. I hope the lenders are qualifying people based on rates that are at a couple percent higher than they are right now.
If you qualify for a $500k home, buy a $350k one, not a $500k one.
Foolish is .. but I guess that is why the world is in the mess it is in.
Average salary of 40k doesn't make for much purchasing power.
In the past we were told to aim for 3x annual income for a mortgage. The average in some parts of the country is now almost 10x. Crazy.
I have serious doubt that you can you back that statement up AND are in fact talking out of your butt.
Someone knows something the common people don't know.....
James
The ones responsible for these rates are obviously banking heavily on the idea that the exposure the bond markets would face by rising interest rates would be more damaging to the economy overall than the increase in rates would be. That being said, I can't see why the BoC could care less about the bond markets...
As time progresses, it's difficult to say which is the greater risk. The average financial guru once thought the CDO's, Ponzi schemes, BreX, Nortel, and US housing were guarantees.
At some point, rates will be higher than these rates they are offering. But if the rate stays below it for longer than it goes above it (simplified example - I know), the lenders can come out ahead with these rates.
Personally, I'm very, very interested in locking in for 10 years at 4%. The only think slowing me down is the thought that if/when we have another child we'd like a bigger house... if we go that route, it's definitely better to stay floating... but then will we still be able to lock in at these rates in 2 years? Decisions, decisions.
Being from Toronto I know that the condo market is not as overpriced as is being stated......Vancouver income to price ratio is far higher.
At 10x the yearly income it would mean about 40% of a persons salary (pre tax) goes towards interest payments....another 25% goes to tax (?) That leaves 35% for living (and further taxing).
http://www.demographia.com/dhi.pdf
It defines price to income ratio as:
median house price divided by gross annual median household income
In 2011 the average sales price of condos in Toronto was about $400K according to MLS: link
I wish I could find a better link for you.
So from what you are saying the average income of families buying these condos in Toronto is around $40K? LOL you 2 have no clue. Would a family with a total income of 40K qualify for a 380K mortgage (assuming 5% down)?
From knowledge of friends and family: for $380K I think the banks are looking at about 100K sustained income.
I don't know if there is a survey that relates the household income to purchase price but if there is how about looking it up an sharing.....otherwise you and Mr times 10 are talking out of your butts.
median household income is that form all house holds: renting, already own from a low market, those that are buying. everyone
median house price...the cost of buying a house.
10.6 for Vancouver...the most ridiculous market in canada hard to get a mortgage to buy a house unless you make a lot of money.
5.5 in Toronto
Am I reading it wrong?
The 2.99% at 5yrs fixed seems quite attractive, given that it'd only take 1-2 interest rate hikes to hit the 3% mark. Are there any significant pitfalls to opting for the fixed 2.99% instead?
Of the reasons given on a few articles I've read about this deal, it seems like these are the fine-print details people are complaining about:
* Smaller pre-payments (up to 10% of total value can be paid in addition to regular payments)
* Can't leave before 5-year term matures
* Requiring a 25% downpayment
* Supposedly super-long amortization periods (40yrs?)
* This product is apparently "no frills"... Not sure if this is an official product designation or just a derrogatory term used by competitors, and how it differs from the others?
Also do you realize that if you purchase a house with a down payment of less than 20% you have to go through CMHC which calculates your amount of pre-approval amount at 5.5% (or somewhere around there).
Lending requirements are tight enough here IMO as we were largely able to avoid a major housing collapse during the recession but even then we have taken steps to eliminate further problems by eliminating the 35 year & 40 Year ammortization.
The only thing real problem is that interest rates have been so low for so long that it could create problems if they are forced to raise them by a large amount. But generally speaking if interest raises rise the economy is doing very well and people's wages would have increased.
If you can get a 2.99% fixed, this is about as good as you are going to get. I'd usually recommend a variable interest rate but with a fixed rate so low the risk you take with a variable rate isn't worth it IMO.
Happy Hunting
And considering how hot the market still is in Vancouver where people are purchasing with no subjects due to the intense competition of multiple offers, I don't see it going down any time soon, only further up.