BMO has joined RBC in raising their Variable rate mortgage pricing. The Financial Post reports that BMO raised their Variable rate mortgages from Prime 015% to Prime less 0%.
Can you say, ‘we want to force borrowers into the more profitable 5 year fixed rate products’??? That’s right.. The Banks would rather see you in a 4.00% rate vs. a 2.25% rate… And why not? They are a business after all.
We have also just received reports from other wholesale lenders that they will raise their pricing as well… If you were looking at buying a house, refinancing your mortgage or had a mortgage coming up for renewal in the next 4 months, I would suggest you speak with your Mortgage Broker and get some rates locked in…
It’s important to understand, the Bank of Canada is not likely to raise their rate anytime soon. Bank Prime remains at 3.00%. We are seeing the Bank Economists tell us they think the economy will remain slow… The Banks do not make as much profit with the low Variable rate mortgages… They want and prefer you to take a 5 year fixed.. these are the most profitable mortgage products for them.
So the bad news is Lenders will raise their Variable rates slightly, the good news is that we are probably going to continue to enjoy mortgage rates under 3.00% for some time to come…..