News Releases

TORONTO, ONTARIO--(Marketwire - March 27, 2012) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense' for Canadians, BMO is releasing a financial tip every week in 2012.

BMO's Financial Tip of the Week: Build equity in your home sooner by choosing a shorter amortization

"For two years now, BMO has been encouraging homeowners to take on a mortgage of 25 years or less. Shortening the amount of time you carry mortgage debt should be a priority for any homeowner, as it saves thousands of dollars in interest rates over the life of the mortgage and ensures Canadians can begin building equity in their home sooner," said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal.

According to a new report penned by Douglas Porter, Deputy Chief Economist, BMO Capital Markets, and Benjamin Reitzes, Senior Economist, BMO Capital Markets, financial stability for Canadian homeowners in the coming years will be supported by locking-in and opting for shortened amortization periods.

"Our interest rate outlook now projects that fixed mortgage rates will trump variable. While the decision ultimately depends on the individual, low rates combined with a shorter 25-year amortization will significantly strengthen household financial stability," said Mr. Porter.

BMO offers the following additional tips to pay down your mortgage sooner:

Put your tax refund toward your mortgage - The April 30^th deadline to file your income tax return is fast approaching. Those receiving a tax refund should consider putting it toward making a lump sum pre-payment to their mortgage. By applying your annual refund directly to your mortgage, you can shave years off your mortgage and save thousands of dollars.

Switch from monthly to weekly mortgage payments - Switching from monthly payments to accelerated weekly payments will save you upwards of $48,000 in interest over the life of your mortgage (based on a $200,000, 5-year fixed term mortgage at an interest rate of 7 per cent over 25 years).

Currently, BMO offers a new 10-year mortgage with a maximum 25-year amortization at a great introductory rate of 3.99 per cent. It is modeled after our popular 5-year maximum 25-year amortization mortgage at 2.99 per cent. Both are available to new and existing customers; the offers are available until March 28, 2012.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.