Hey, what happened to the BMO “Low Rate Mortgage”?

Bmo wideRemember the BMO “Low rate mortgage”?  It seems to have disappeared…  Well, not really.   BMO has quietly changed the label and now calls it the ‘Smart Fixed Rate Mortgage’.  

Sounds impressive…but it’s not.   I’ll save the suspense.  This is the same product that’s full of limitations, restrictions and an inflated prepayment penalty calculation…. It isn’t the best rate…   Certainly NOT the best mortgage product.

In case you aren’t aware, we call these “NO FRILLS” mortgage products.   And our industry has seen a huge supply of these products offered over the past few years.   The benefit is supposed to be a lower interest rate (sure, who doesn’t want that?).   BUT, these products end up costing borrowers MORE due to product limitations, restrictions and inflated prepayment penalty calculations.

BOTTOM LINE…  stay away from this BMO product and any other No Frills mortgage products.   It’s not something I would recommend to any client.   Today, there are mortgage products with lower rates, better terms, conditions, privileges AND better prepayment penalty calculations.     You won’t be forced to sell your house if you need to get out of your mortgage..  You don’t have to give up anything to get a better mortgage product.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

One Response to “Hey, what happened to the BMO “Low Rate Mortgage”?”

  1. Ryan W. Smith Says:

    It’s nice to see another Mortgage Broker out there showing their clients the real ‘devil in the details’ of products like this. The low rates of a ‘no-frills’ mortgage are attractive at first glance, but with a little bit of good advice it can be easy to avoid the trap being presented. Keep the good advice coming, thanks Steve.


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