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BMO Launches New Variable Rate MortgageBMO Offers Attractive Lending Rate: 3.8% with Option to Lock in at Any Time

TORONTO, February 10, 2009 – BMO Bank of Montreal announced today a new 5-Year Variable Rate Closed mortgage product that allows customers to take advantage of record-low lending rates with the flexibility to lock into a fixed-rate closed mortgage at any time.

“Recently we've seen an increase in the number of customers choosing a variable rate mortgage”, said Lynne Kilpatrick, Senior Vice President BMO Bank of Montreal. “At 3.8% our new 5-Year Variable Rate Closed mortgage offers a very competitive rate yet gives our customers the peace of mind of knowing they can lock in at anytime should rates rise.

"We want to make buying a home easier and help you pay off your mortgage faster. Our mortgage experts are here to help you make sense of the home-buying process and choose the right mortgage with confidence”, added Kilpatrick.

Five Tips for Managing Your Mortgage

1. When you get Paid, Pay your Mortgage

  • Most people are paid every two weeks. Consider aligning your mortgage payment with your paycheque - you'll be amazed how much you can save in interest over the life of the mortgage.
  • Traditionally mortgage payments are made every month.
  • With more frequent and accelerated payments, you'll pay your mortgage down faster, saving you interest costs over the long term.

2. Take Advantage of Pre-Payment Options

  • Increase monthly payments and/or make lump sum payments using 20 20 Prepayment options every year to become mortgage-free faster. With the first “20” you can prepay up to 20% of the original mortgage amount each calendar year in minimum amounts of $100 as many times as you wish during the year. With the second “20” you can increase your mortgage payment (principal and interest) by up to 20%, once each calendar year.


3. Skip payments if necessary

  • Skip up to one month of mortgage payments in a calendar year for any reason with the Take A Break option.
  • BMO's Family Care option frees up cash to help when a newborn arrives or you are caring for an ailing family member by letting you skip up to four months of mortgage payments.

4. Assure your family's financial security

  • Mortgage Life Insurance and Accident & Illness Protection Insurance are available to protect your family when you need it most.
  • Mortgage Life Insurance will cover the balance of your mortgage — up to a maximum of $600,000.
  • Accident & Illness Protection will provide a maximum of $3,000 per insured person per month.

5. Build a rainy day borrowing reserve

  • When you take advantage of your prepayment privileges, you automatically start to build a borrowing reserve called a Mortgage Cash Account. As this reserve grows, you can re-borrow these funds at any time, for any reason, in amounts starting from $2,500 without the inconvenience of a new mortgage application.

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