BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!

So you’re shopping for a mortgage… and you see 2.99% advertised by BMO.. and you think, Wow, that’s a great rate!!… but is it really that great?   And is it really a great mortgage product?

Well, first, what if I told you there was a lower rate out there?   And what if I told you there was a lower rate without the restrictions and limitations of BMO’s NO FRILLS mortgage?

Ok, now that I got your attention, let’s continue…We saw this same product and rate advertised last year, in January 2012.   BMO promoted their NO FRILLS, oops,  I’m sorry, they want us to call it a ‘low-rate’ mortgage (guess that sounds better).   There was a buzz in the air.  My phone rang off the hook and my inbox was full of emails asking what this was all about.

So I’ll repeat what I said last year, as the message is the same.  This rate and mortgage isn’t anything special.   It’s a NO FRILLS mortgage.….these products have been around for years…. meaning the mortgage comes with certain restrictions and limitations attached to it.   I strongly suggest you click here to read up on the details of this product.

ATTENTION MORTGAGE SHOPPERS:  There are better rates out there for NO FRILLS mortgages…..yes, it’s true… We’ve seen other NO FRILLS products advertised as low as 2.84%….   But I would NEVER recommend that anyone take any of these products…. and the reasons are simple.. if you ever had to get out of the mortgage, you will face the infamous BIG SIX BANK penalty calculation…(something I’ve talked about many times in previous articles)… and you would also face the restrictions of having to sell your home to refinance with another Lender… and then there’s the limited prepayment privileges……. These limitations and restrictions can cost you $10k , $20k, $30k or more depending on your mortgage balance and personal circumstances….

BUT HERE’S THE BEST PART.…. You don’t have to give up anything to get 2.99%!!   Several Lenders are offering 2.99% or better!   In fact, there are a limited number of Lenders offering 2.89%!!   So why would anyone take this product??   I can’t think of any reason either…

Don’t fall for the hype…  check with a reputable Mortgage Broker before making a decision….unfortunately, I’ve seen far too many people jump at this offer before getting the facts.

As always, I welcome your calls and comments.

Looking out for your best interest.

Steve Garganis 416 224 0114 steve@mortgagenow.ca