27 March 2014

“We took necessary measures during the period from 2008 to 2012. Budgets for 2013 and 2014 included some additional measures for reducing the government’s involvement into  real estate market,” – he said in a statement. “And we’ll keep monitoring the market.”

It should be noted that BMO’s 2.99% offer is far from the lowest 5-year fixed rate in the current market, as many brokers and small lenders have been offering sub-3% for some time already.

Before you make the final decision concerning this offer, it’s necessary to understand that this product has certain serious restrictions, such as:

• The maximum amortization is 25 years.

• The maximum rate hold is 90 days (in case of some lenders it’s up to 120-180 days).

• The maximum lump-sum pre-payment is 10% per year, which is 1/2 of the 20% that BMO usually offers and, of course, significantly lower than other lenders may allow.

• The maximum payment increase is 10% per year, which is 1/2 of the 20% that BMO usually offers and, of course, significantly lower than other lenders may allow.

• This mortgage is fully closed unless you decide to sell the house to an unrelated purchaser for a reasonable market price, refinance (only with BMO) or early renew for another BMO mortgage. In this case you’ll have to pay pre-payment penalty and probably face an IRD.

• Such services as BMO Mortgage Cash Account, Skip-a-Payment and ReadiLine are not available in case of this BMO offer. In addition to it, this mortgage product is not available to non-owner occupied rental real estate.

In other words, it’s extremely important to discuss this offer with a mortgage professional and see if such product with all these restrictions is good for you. Especially, when there are many other variants with even lower rates and without restrictions.