News Releases

TORONTO, ONTARIO--(Marketwire - Jan. 12, 2012) - BMO Bank of Montreal announced today that Canadian Mortgage Trends has awarded its 2011 Mortgage of the Year to the low-rate mortgage from BMO. The award, granted annually since January 2007, recognizes the mortgage product that has provided the greatest innovation, flexibility and/or cost savings to homeowners.

"The low-rate mortgage from BMO has altered the industry landscape by being the only major bank mortgage to offer transparent low rates to consumers. For that reason, it is our 2011 Mortgage of the Year," said Robert McLister, Editor, Canadian Mortgage Trends.

"BMO is proud to receive this kind of industry recognition for what we believe is an outstanding mortgage product," said Frank Techar, President and Chief Executive Officer, Personal and Commercial Banking Canada, BMO Bank of Montreal. "We developed the low-rate mortgage because customers were telling us that they wanted to become mortgage-free faster, pay less in total interest and have the comfort of a fixed interest rate but, above all, they wanted an easy-to-understand, straightforward product. This mortgage delivers on all counts and differentiates BMO in the eyes of Canadian homeowners and home buyers."

In celebration of the award, BMO Bank of Montreal announced today that it is lowering the rate for its 5 year low-rate 25 year amortization mortgage by 50 basis points to 2.99 per cent effective immediately and available for a limited time until January 25^th, 2012.

BMO offers the following tips for Canadians to help them reduce mortgage debt and become mortgage free faster:

Consider a shorter amortization:

• The shorter the life of the mortgage, the less you pay in interest.
• Choosing a 25-year amortization can help you become mortgage-free faster and ultimately put more savings towards long term goals, such as retirement.

Make sure you can afford your home, both now and in the future:

• Stress test your financial budget using a mortgage payment based on a higher interest rate. If your rate rises even 1 percentage point from 5 per cent to 6 per cent, you will need an additional $146 per month on a $250,000 mortgage amortized over 25 years.
• Total housing costs (mortgage payments, property taxes, heating costs, etc.) should not consume more than one-third of household income.

Think about the future:

• View your home as an investment. Consider its location and accessibility, and whether or not renovations may be required down the road.
• Pay down short term debt before taking on a major financial commitment such as buying your first home or upgrading to a larger home.

Make a larger down payment:

• If you can provide a bigger down payment, it's a significant way of helping you pay less interest over the life of your mortgage.
• With a down payment of at least 20 per cent, you avoid paying mortgage default insurance.

Make pre-payments when you can:

• Pay accelerated weekly or bi-weekly instead of monthly.
• Increase your mortgage payment (principal and interest).

Think carefully about fixed vs. variable:

• While variable rate mortgages have been a winning strategy over the long term, fixed rate mortgages (currently at historic lows) provide the peace of mind of insulating you against rate increases and the certainty of knowing how much of your mortgage you will have paid down at the end of your term.