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TORONTO, ONTARIO--(Marketwire - May 11, 2012) - BMO Bank of Montreal announced today that customers who selected the BMO five-year fixed rate mortgage with a maximum 25-year amortization so far in 2012 will have saved over $167 million dollars collectively by the time their mortgages have been paid off*.

"The response to this product has been over-whelming," said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal. "We've received a number of testimonials from across the country that tell us our customers are benefiting from a product that's designed to help them own their home sooner and save thousands of dollars in the process."

"We know that our customers value products that allow them to achieve their financial goals in a way that's affordable over the long term," added Ms. Archdekin. "Based on the most recent feedback, this product has addressed our customers' wants and needs and we believe the savings tally will only grow with time."

Based on current industry figures, the savings are equivalent to approximately:

• 30,000 annual post-secondary tuitions
• 23,000 annual grocery bills
• 450 new homes

Ms. Archdekin added that with interest rates set to climb, it's in Canadians' best interest to lock in to a fixed rate mortgage. According to a report 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 into fixed term mortgages and opting for shorter amortization periods.

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

BMO offers the following tips for Canadians to help them become mortgage-free faster:

Consider a shorter amortization: The shorter the life of the mortgage, the less you pay in interest. For example, on a $400,000 mortgage at a 5 per cent interest rate, moving from a 30 year to a 25-year amortization can save upwards of $70,000 in interest over the life of the mortgage. An amortization of 25 years or fewer will also ensure you build equity sooner.

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.

Stress-test your mortgage: Use a mortgage payment based on a higher rate to stress-test your budget; total housing costs (mortgage payments, property taxes, heating costs, etc.) should not consume more than one-third of household income. 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.

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.

*Savings calculation is an approximation and is based on the total number of BMO customers (new, refinance, renewals) who have taken a BMO 2.99%APR low rate fixed 5 year mortgage since January 1, 2012 until May 2, 2012. Savings are based on (i) total interest savings of these customers (determined as on the difference between 2.99%APR and the lowest published rate from a Canadian chartered bank for the same time period or the customer's prior rate in the case of a refinance or an early renewal multiplied by the mortgage amount and the 5 year term) plus (ii) amortization savings of these customers (determined as the total amount of BMO mortgages granted during this time period multiplied by the percentage of customers who took a 30 year amortization, divided by the average mortgage balance of these customers and all multiplied by the average interest savings per customer for the average duration of a 5-year term at 2.99%APR on this average mortgage balance amount). The savings calculation assumes that no prepayment charges were payable by customers for refinances or early renewals and that the difference in interest rate described in (i) rate remains the same in the last 5 years of a 30 year term. The Annual Percentage Rate (APR) for the low rate fixed 5 year mortgage was 2.99%. APR assumes no fee(s) apply. If we required an appraisal, the appraisal fee would increase the APR.

Web: www.bmo.com

Twitter: @BMOmedia