Bank of Montreal Mortgage Rates Review

Bank of Montreal Mortgage Rates Review

Bank of Montreal Mortgage Rates

The Bank of Montreal (BOM) offers a variety of mortgage options suitable to your needs. You can choose from open, closed, or convertible mortgage. Several factors may influence your decision for what type of mortgage best meet your requirements. Mainly, your choices depend on your capability to pay.  There is a plan available for you whether you can pay your mortgage immediately or plan to engage in long-term agreements. Your down payment may also be a factor in choosing your desired mortgage plan. Let’s discuss further the different types of mortgage options to help you decide.

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Compare All BMO Mortgage Rates

Bank of Montreal Open Mortgage Rates

Since this is an open type of payment, scheduling your payments is flexible. You may pay ahead of time or make additional payments to avoid high interest rates. You will not be penalized for making such mortgage payments. This plan is good for you if you can pay immediately. However, keep in mind that because of the flexibility of this plan, it has a higher interest rate than a closed mortgage.

Bank of Montreal Closed Mortgage

This type of mortgage strictly follows payment schedules. Thus, you cannot make additional or advanced payments anytime. However, the good thing about this is that its interest rate is low, making it the most popular mortgage plan.

Bank of Montreal Convertible Mortgage

This plan is just like close mortgage, but it can be extended to a longer fixed rate term since the interest rate is low. Hence, if you are not sure when you can pay your mortgage in full, you may opt for this type of mortgage.

More Details on Bank of Montreal Mortgage Rates

Mortgage rates vary from time to time and this is always updated in the BOM website. Also, consulting with a BMO mortgage broker make you more knowledgeable on the different options and rates in the market. If you have decided to apply for a mortgage, you may contact a BMO mortgage agent at 1-877-225-5266. However, if you feel comfortable doing things on your own, you can visit the website and fill-up an online mortgage application form. Accomplishing this may take up to 20 minutes. You may check the status of your application through the unique Loan Application Number and Personal Identification Number which will be provided to you once you submit your accomplished form.

BMO Mortgage Application Process

Several details will be required from you when filling-up the application form. Hence, it will be efficient to have these details with you when applying for a mortgage plan. You will be asked for your (1) monthly income less the tax, (2) monthly housing expense, (3) value of any of your properties, vehicles, or investments, including amount of your savings account, (4) current balance of your credit card/s or loan/s including monthly payments of your mortgage and property taxes, and (5) financial information of your joint applicant, if you have one.

Short Background on Bank of Montreal

The BMO Financial Group was established in 1817 and is based in Canada. It has more than 10 million clients: individual, commercial, corporate, and other institutions not just from Canada but from other countries as well. Aside from offering great products, all operating groups are customer-centered. Hence, its vision is to be the bank that defines great customer experience. Aside from mortgage options, they also offer other products such as BMO credit cards, rewards cards, low interest cards, and BMO GICs. Terms of these products vary.

What is Prime Rate and what is BMO’s prime rate?

Prime rate is the set lending rate to be used when determining the interest rate that will be applied to various types of credit cards, loans, and mortgages. This is used by banks and financial institutions nationwide. Currently, the Bank of Montreal has a prime rate of 2.70%. This rate is used by most major financial institutions in Canada. Bank of Montreal adjusts its prime rate in regards to Bank of Canada’s (BoC) interest rate policy. Meaning the rate BoC sets as its key rate is also the same rate BOM sets as its prime rate. Hence, when BoC raises its overnight rate by 25 basis points, BOM also raises its prime rate by 25 basis points.  However, when BoC lowers its rate by 25 bps, BOM will lower its prime rate only by 15 bps same with other major banks in Canada. Changes in prime rates may happen anytime, but banks usually adjust their prime rate in relation to BoC’s announced interest rates.

How is the prime rate affecting the mortgage rate?

The interest rate of the variable mortgage from Bank of Montreal is expressed as the prime rate and a certain percentage point will be added or subtracted to it. For example, if the prime rate is 3.00% and your mortgage rate is prime minus 0.50%, then your mortgage rate will be 2.50%. Following the same prime rate, but your mortgage rate is prime plus 0.50%, your mortgage rate will be 3.50%.

Can I estimate my payment options?

Yes, you can estimate your payment by using the Bank of Montreal Mortgage Calculator. You will just need to calculate the following details and input in the mortgage calculator found on the website: (1) purchase price when purchasing a new property or renewal amount of mortgage when only renewing, (2) down payment when purchasing a new property, (3) amortization period, and (4) your mortgage rate.

BMO’s Mortgage Rates

Whether it’s your first time buying a house, you are new in Canada, or you are planning to purchase a second property, Bank of Montreal has the solution for you. You can choose between its 5-year BMO Smart Fixed Mortgage or its BMO Eco Smart Mortgage.

BMO Smart Fixed Mortgage

This provides one of the bank’s special offers in terms of mortgage plan. It has a lower posted rate and amortization period may last up to 25 years. This plan may also be an option if you are looking to renew or refinance your other BMO mortgages.

BMO Eco Smart Mortgage

If you are considering to make your house eco-friendly, then this plan is for you. This is made for houses with energy-saving features. If you are interested and want to know the mortgage rate, you may contact BMO for details as your house will need to be assessed first to qualify for the ECO Smart Mortgage. There are also other institutions that offer this plan but BMO may provide you with a lower rate.

Is there a way to get lower payments?

Yes, there is, even if Bank of Montreal already offers lower rates than other major banks. You may still achieve a lower interest rate with the help of a mortgage broker. The mortgage broker may present you with several mortgage terms from different institutions to help you decide. Another way to lower your payment is to increase the amount of your down payment or lengthen your amortization period.