News Releases

New Harris/Decima survey says 74 per cent of Canadians looking to purchase their first home are considering an amortization of 25 years or less

TORONTO, March 3, 2010 - On the eve of the federal budget, BMO Bank of Montreal is making it easier for Canadians to be their household's Minister of Finance and reduce interest costs with BMO's new five-year fixed rate mortgage.

The new mortgage:

• Offers the lowest fixed rate for a five-year closed term at 3.75 per cent
• Allows customers to repay their mortgage faster with a maximum 25-year or less amortization
• Saves homeowners over $67,000 in interest costs compared to leading competitors' five-year special fixed rate at 4.09 per cent and 35-year amortization (based on a $200,000 mortgage)

"Customers have told us that they want to become mortgage-free faster, pay less in total interest and have the comfort of a fixed interest rate but, above all, they want an easy-to-understand, straightforward product," said Frank Techar, President and CEO, Personal & Commercial Banking Canada, BMO Financial Group. "Results from a new poll show that nearly 70 per cent of current home owners are looking to pay down their mortgage sooner. If you are looking to lock in at a great rate and protect yourself when interest rates rise, there is no better mortgage in Canada for you."

The survey also found that:

• 69 per cent of current home owners would consider a shorter amortization period if it helped reduce the overall cost during the life of their mortgage
• 74 per cent of Canadians looking to purchase their first home are considering an amortization of 25 years or less

BMO's economics department says it is widely expected that interest rates will rise in the not-too-distant future.

BMO set the maximum amortization for this mortgage at 25 years, instead of 35 years. "This is the right mortgage for the times," Mr. Techar added. "This new product is consistent with the government's policy to support the long-term stability of Canada's housing market and BMO's own promise to provide the clarity our customers are looking for to help make the right financial decisions. By reducing your amortization, you will save tens of thousands of dollars in interest charges. If you want to have your mortgage-burning party a decade sooner than your friends, visit your branch or take advantage of our mobile mortgage specialists - they'll come right to your door to help you choose the mortgage that's right for you. We'll work with you to stress-test your budget now, so you don't become stressed out later.

"BMO is making money make sense for Canadians," said Mr. Techar. "This new mortgage, combined with BMO SmartSteps, which provides essential banking tips, gives our customers immediate ways to save money now."