News Releases

BMO Bank of Montreal today announced that it will be ready to offer 20 per cent down mortgages without requiring mortgage insurance as soon as Bill C-37 becomes law.   The new legislation is expected to be proclaimed by April 24, 2007.    BMO's announcement will ensure that qualifying customers will be able to take immediate advantage of the cost savings associated with the new law.  

Under the existing Bank Act regulations, a bank cannot provide a mortgage loan for more than 75 per cent of the value of the property, without having the customer purchase mortgage insurance.    Bill C-37 raises the loan to value ratio requiring mortgage insurance from the current 75 per cent to 80 per cent.   

“We believe that a great number of home buyers will benefit from this change and we are delighted to be able to take a leadership position in making this new option available immediately,” said Cid Palacio, Vice President, BMO Bank of Montreal.  

Ms. Palacio noted that based on an average home price of $300,000, a home buyer with only a 20 per cent down payment can now save an average of $2500 in insurance premiums. 

“We see a number of customers scrambling to meet the 25 per cent down payment, in order to avoid paying the insurance premium,” said Ms. Palacio.  “This often means that they are dipping into their credit cards or rainy day savings, to make up the difference.  These changes will allow those homebuyers to reduce their down payment and get into their new home faster.

“This is also good news for young, prospective first time home buyers who are saving for a down payment,” she added. “We encourage anyone who wants to take advantage of the new mortgage options to speak with their BMO mortgage specialist to determine how they can benefit from the changes.”

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization.  With total assets of $356 billion as at January 31, 2007, and more than 35,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and solutions.  BMO Financial Group serves clients across Canada through its Canadian retail arm, BMO Bank of Montreal.

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