Tuesday, January 17, 2012

BMO 2.99% 5 Year Offer

Here is a "closer look" at the BMO 2.99% 5year offer- and some of the points to be aware of.

This is a two-week promo (at the moment) valid until JANUARY 25TH.

There are conditions to their offer. The main terms of BMO's special are as follows:

  • Maximum Amortization: 25 years
  • Rate Hold: Up to 90 days
  • Pre-Approvals: Allowed
  • Lump-sum Pre-payments: 10% maximum per year (1/2 of the 20% that BMO normally allows)
  • Optional Payment increase: 10% maximum per year (again, 1/2 of the 20% that BMO normally allows)
  • Term: Fully closed unless you sell the property, refinance (with BMO only), or early renew into another BMO mortgage.
  • BMO Mortgage Cash Account: Not available with the Low-Rate
  • BMO Skip-a-Payment: Not available with the Low-Rate
  • BMO ReadiLine: Not available with the Low-Rate
  • Other Details: Not applicable to non-owner occupied rental properties

Most importantly, the client is tied to BMO for the entire 5 year term of their mortgage, even if they want to break it and pay a penalty, they are forced to stay with BMO. Client loses negotiating power.

Included is a link to Canadian Mortgage Trends below, the link, and subsequent responses from other peers give some other strategy and personal commentary.


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