It was bound to happen. BMO announced their so-called ‘low-rate’ (NO FRILLS) 5 yr fixed rate mortgage would be increasing to 3.09% from 2.99%. This comes shortly after the Federal Minister of Finance, Jim Flaherty, said that he called BMO and asked them to pull their 2.99% ads. Last week, the Minister’s office asked Manulife Bank to withdraw their recent ad promoting a similar low rate.
While, 2.99% isn’t the best rate today, it was the lowest advertised rate from the BIG SIX BANKs. It was somewhat symbolic. Of course, Mortgage Brokers have access to even lower rates through the wholesale mortgage market, but these lenders don’t have the deep advertising pockets that BMO or the other BIG SIX BANKs have. So the publicity surrounding this rate and the increase will get much more air-time. You can actually find full-featured 5 year mortgages at 2.89% today, through a good mortgage broker (a word of warning.. I’ve seen lower rates offered, and I have access to these products… but these products are not full-featured and come with some limitations that make them less attractive… just be careful when choosing your mortgage and your mortgage broker)… Read the rest of this entry »