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Rates are based on a home value of $400,000
Rates are based on a home value of $400,000
Rates are based on a home value of $400,000
Updated
BMO Bank of Montreal is Canada’s oldest bank, having officially opened its doors back in 1817 under the name Montreal Bank.
It is one of Canada’s “Big 6” Banks, and currently ranks fourth largest in the country based on market capitalization. It is also the eighth largest bank in North America.
BMO, also know as BMO Financial Group, boasts servicing 12-million customers across Canada, the United States and worldwide. The bank employed more than 45,513 people as of the end of 2022, and maintains 1,400+ branches across the country.
BMO’s residential mortgage portfolio stood at more than $148.8 billion as of 2022.
The bank sells its mortgage products through mortgage specialists and branches, but does not participate in the mortgage broker channel like some of its big-bank peers. That means if you’re using a mortgage broker to find your rate, they won’t be able to get you a mortgage through BMO.
BMO earned a reputation in 2012 for its headline-making 2.99% five-year fixed mortgage rate specials. That rate triggered the ire of Canada’s Finance Minister, who implied the rate was so low as to be irresponsible. How far we’ve come since then.
Aside from its occasional rate offers, BMO’s mortgage rates are generally not much different from its Big 6 bank competitors.
Like the other big banks, BMO offers three different types of mortgage rates: posted rates, featured rates and discretionary rates. Here is some additional information on each type…
Posted rates are generally the most expensive mortgage rates available, but few mortgage customers actually pay them. That’s because the banks keep them artificially high since they’re most often used as a reference point for calculating rate discounts and prepayment penalties.
If a big-bank mortgage rep ever tries to sell you on a posted mortgage rate, simply walk away.
As mentioned above, BMO has historically been active in leading the market with aggressive mortgage rate promotions. These “special” offer rates are generally the lowest mortgage rates advertised by the big banks, even though they are often higher compared to other market rates. The most aggressive big-bank rate specials are typically only available for a limited time.
If you do your research, including using a rate comparison site such as this one, you’ll often find rates offered by other lenders that are even lower.
These are the best mortgage rates available from the big banks, but there’s one catch. These rates are not advertised publicly. You can usually only obtain them through negotiation.
When negotiating with a BMO mortgage rep, don’t be afraid to ask for their “lowest floor rate,” and if you’re still not happy, you can request a “pricing exception.” But, you’ll have to be well-qualified, and it sometimes helps if you’ve been a long-time bank customer and have other products with the bank.
BMO’s standard offering of mortgage products is similar to most of the other big banks and mortgage lenders. This includes the most common 1- to 10-year fixed mortgage rates, as well as 3-year and 5-year variable rates (more on the variable rate products below).
BMO also offers its clients hybrid and cash back mortgages, as well as an 18-year open mortgage (which almost no one gets due to it’s extreme rate).
The bank’s marquee mortgage product is its 5-year Smart Fixed special mortgage, previously called the “Low Rate Mortgage.”
BMO offers both insured and uninsured Smart Fixed rates, and the products come with certain restrictions:
Most BMO mortgage rates offer an industry-leading 130-day rate hold and flexible 20% lump sum and 20% payment increase prepayment features. The bank also allows you to make multiple prepayments each year, unlike some of its competitors.
Another feature included with most BMO mortgages is its annual skip-a-payment options:
The company's mortgage clients have several payment frequency options, including: monthly, semi-monthly, bi-weekly, weekly, accelerated bi-weekly and accelerated weekly.
As mentioned above, BMO offers a 3-year and 5-year variable rate. The bank became the first Big 6 lender to widely advertise a record variable rate discount of prime – 1.00%.
These mortgages can be converted to a fixed rate at any time, although clients who convert to a fixed rate are seldom offered the banks lowest possible rates in our experience.
BMO offers fixed-payment variable rates, meaning that if prime rate goes up, your monthly payment remains the same. Instead, the amount of your payment going towards interest will increase and the amount going towards paying down the principal will decrease, and vice versa if prime rate falls.
Variable, or “floating” rates, can be appealing to some for two key reasons:
1) The borrower expects rates to stay low or fall.
2) They may foresee needing to break the mortgage early, in which case variable rates offer much lower prepayment penalties compared to fixed rates.
BMO’s payment frequency options for its variable rates are similar to its fixed rates: monthly, semi-monthly, bi-weekly, weekly, accelerated bi-weekly and accelerated weekly.
| Date | 5-year fixed rate | 5-year variable rate |
| March 13, 2023 | 5.04% | 6.50% |
| March 3, 2023 | 5.04% | 6.50% |
| January 27, 2022 | 5.44% | 6.50% |
| December 9, 2022 | 5.44% | 6.25% |
| December 2, 2022 | 5.44% | 5.75% |
| October 14, 2022 | 5.44% | 5.54% |
| September 23, 2022 | 5.17% | 5.20% |
| September 9, 2022 | 5.17% | 5.45% |
| July 29, 2022 | 5.17% | 4.35% |
| July 15, 2022 | 5.14% | 4.35% |
| June 17, 2022 | 5.04% | 3.25% |
| June 10, 2022 | 4.69% | 3.25% |
| June 3, 2022 | 4.49% | 3.25% |
| May 13, 2022 | 4.29% | 2.65% |
| April 29, 2022 | 4.09% | 2.65% |
| April 15, 2022 | 3.84% | 2.65% |
| April 8, 2022 | 3.72% | 2.15% |
| April 1, 2022 | 3.69% | 2.15% |
| March 25, 2022 | 2.99% | 2.05% |
| March 18, 2022 | 2.99% | 1.95% |
* As of March 15, 2023
The Bank of Canada increased its overnight rate almost eight times between 2022 and 2023. Starting March 2022, the central bank's overnight rate hikes triggered a drastic change in mortgage interest rates. Scotiabank, like other major banks, increased its prime rate and mortgage rates drastically, slowing down borrowing. Scotiabank increased its prime rate by almost 4% from January 2022 to January 2023, year-on-year. While Bank of Canada's rate was 0.25% in January 2022, Scotiabank prime rate was 2.45% which increased to whopping 6.70% in January this year.
BMO’s Homeowner ReadiLine Line of Credit is the bank’s marquee HELOC product.
It’s a re-advanceable home equity line of credit that allows borrowers to access up to 80% of their home value. As the mortgage is paid down over time, more money becomes available via the line of credit.
Funds borrowed from the Homeowner ReadiLine Line of Credit can be used for a multitude of purposes, including home improvements and renovations, high-interest debt consolidation, investing, post-secondary education for a family member, etc.
Similar to other banks’ re-advanceable HELOCs, the borrower must have at least 20% equity in the home and they can only access up to 65% of the home value using the revolving line of credit portion. The remaining 15% must be accessed as an amortizing loan with scheduled principal and interest payments, similar to BMO’s standard mortgage.
One of the draws to BMO’s ReadiLine, or any HELOC for that matter, is interest-only payments. They tend to drastically cut monthly carrying costs versus a regular mortgage, even compared to a mortgage with a long 30-year amortization.
BMO offers a popular feature on most of its mortgage products known as the BMO Mortgage Cash Account.
Any funds you prepay towards your loan go towards the Mortgage Cash Account, which is held within the mortgage itself.
Funds in this account can be re-borrowed at a later time, starting from $2,500. The re-borrowed funds are added to your mortgage principal at your existing interest rate for the rest of the term.
This makes for a very low-cost source of funds for borrowers suddenly in need of some cash. It also effectively removes the decision facing borrowers as to whether they should pay down their mortgage faster or build up emergency reserve funds.
BMO is the only major Canadian lender that offers this feature and it’s truly value-added. Some eligibility requirements must be met so speak with the bank for details.
BMO mortgages must be obtained either directly through the bank’s branches, mortgage specialists or through its call centre.
As mentioned above, BMO does not participate in the mortgage broker channel like several of the other big banks. Thus, you can not obtain a BMO-branded mortgage if working with a mortgage broker.
BMO did work with brokers previously but left the broker channel in 2007.
If you currently have a mortgage with another lender and plan to switch to BMO, the bank will often pay the appraisal and legal (registration) fees, so be sure to ask about that.
Most of BMO’s new mortgages are sold through its team of mortgage specialists located around the country.
They operate similar to a mortgage broker in that they receive a commission for each BMO mortgage product that they sell. Also like a broker, they can forego some of that commission to “buy down” your mortgage rate. This is important to keep in mind during your rate negotiations.
Know as well that BMO mortgage specialists mainly serve new bank customers. BMO clients wanting to renew a mortgage should contact their branch or the BMO call centre instead.
To find the BMO mortgage specialist nearest to you, click here.
The key to securing the best BMO mortgage rate is smart negotiation. Never accept the first rate offered from BMO, or any other banks for that matter. The reason: big banks like to leave room to negotiate by starting with a higher first offer.
And haggle you should. A 0.1 percentage point savings is roughly $470+ per $100,000 of mortgage amount over five years. Use RATESDOTCA rates as leverage whenever you can and make them think you’re shopping around.
While it’s important to negotiate to secure a lower mortgage rate, however, that tactic only works if you’re a well-qualified borrower. This means having a strong credit score and low debt ratios. It helps to have a secure job and a clean history of loan repayments as well.
If this describes you, most lenders would likely be willing to come down on their rate to secure you as a client. If they refuse to budge, don’t be afraid to call their bluff and tell them you plan to shop around at other lenders.
As we mentioned above, a bank’s lowest discretionary pricing doesn’t typically apply to existing clients who are renewing their mortgage. A bank’s best rates are usually used to woo brand new clients.
Having said that, you also should never expect to pay posted rates at renewal (although sometimes banks try to sneak them into renewal offers). Either way, you can certainly negotiate down the renewal rate offered by the bank. Just be sure to keep your rate expectations realistic.
Banks know most clients want to avoid the hassle of moving their mortgage to another lender. And they’re just as likely to call your bluff should you threaten to go elsewhere.
But if the rate you’re being offered truly reeks, you should be willing to switch your mortgage to another lender if you’re able to find a lower rate. The rate savings could be significant and make that short-term hassle well worth it. If you do intend to shop your mortgage around to other lenders, be sure to leave yourself plenty of time before your term ends. It’s advised to start your renewal 90 to 120 days before the maturity date.
Have more questions about BMO mortgage rates? We've got all your questions answered right here.
A potential new homeowner can reach out to the bank directly or consult with a mortgage broker about BMO mortgage types and rates available. For easier access to available rates, you could also use a rate aggregator like RATESDOTCA to get a quote from 50+ lenders across Canada. The cheapest possible rate is just a click away, all you need to do is provide us with some of your details.
What are the differences between buying or renewing mortgage through BMO mortgage specialists and BMO call center agents?
Buying a home is exciting and overwhelming at the same time, because of the challenges that could come your way. It is imperative to find an expert to help you navigate through the biggest step towards your financial journey. BMO mortgage specialists are financial experts who would assess your mortgage loan capabilities and suggest the way forward. A BMO call centre agent would guide you to approach the right person for your problem solving. While a BMO mortgage specialist could help you find the best rate and negotiate on your behalf, a BMO call centre agent would only help you with what’s available to you at the moment.
In order to find the best rate for your mortgage, you could check out the current available rates on the BMO website or reach out to a mortgage broker or even use a rate aggregator website like RATESDOTCA. The best way to assess your financial capabilities for a mortgage is to go through a mortgage broker or agent.
If your existing mortgage with BMO is ending soon, you could ask the bank to renegotiate the terms of your next mortgage and provide the lowest rate available. Or if you’d like to shop around and compare rates by other lenders, you could use RATESDOTCA to do that for you. Ending an existing mortgage can be expensive but if that cost is less than what you’d save with a new lower mortgage rate over a period, that risk might be worth taking. The best way forward would be to seek advice from an experienced mortgage broker.
The best way to find out the cheapest mortgage rate available to you is by shopping around and comparing rates. You could also ask your mortgage broker to help you find the best rate available. A mortgage broker can negotiate on your behalf with the bank to provide the best rate available . At RATESDOTCA, you can get help identifying the best available mortgage rate from 50+ lenders across Canada.
A rates aggregator website like RATESDOTCA can help you identify the best available mortgage rate by shopping around and comparing rates from 50+ lenders across Canada. You could also ask your mortgage broker to help you find the best rate available as per your needs.
These are several benefits of getting a mortgage with BMO:
Likewise, here are some of the disadvantages of getting a mortgage from BMO:
Like the other big banks, BMO offers a selection of mortgage calculators that let you calculate everything from mortgage payments and mortgage affordability, to prepayment charges and insurance coverage options.
Here are some of its top mortgage calculators:
You can find BMO's mortgage calculators here.
What is BMO’s prime rate?
As one of the country’s Big 6 banks, BMO’s prime rate is factored into the formula that determines Canada’s benchmark prime rate.
BMO has historically maintained its prime rate in line with the majority of the other big banks. This wasn’t the case for a period of about 18 months in the early 1990s, however, when BMO dropped its prime rate by 25 bps lower than its peers.
All of BMO’s floating rates (variable mortgage rates, home equity lines of credit, etc.) are priced off of its prime rate, which generally only changes when the Bank of Canada’s overnight rate is raised or lowered.
Click here to see Canada's current prime rate.
| Month/yr | Prime rate |
| Jan-22 | 2.45% |
| Feb-22 | 2.45% |
| Mar-22 | 2.7% |
| Apr-22 | 3.2% |
| May-22 | 3.2% |
| Jun-22 | 3.7% |
| Jul-22 | 4.7% |
| Aug-22 | 4.7% |
| Sep-22 | 5.45% |
| Oct-22 | 5.45% |
| Nov-22 | 5.95% |
| Dec-22 | 6.45% |
| Jan-23 | 6.7% |
| Feb-23 | 6.7% |
| Mar-23 | 6.7% |
Prepayment charges are the penalties a borrower must pay if they break their closed mortgage before maturity or prepay more than the permitted annual amounts.
BMO calculates its prepayment charges much like the other Big 6 banks. Its penalties for fixed rates are based on the greater of:
Prepayment penalties for most variable rates are simply three-months’ interest penalty.
Engaging a mortgage broker before renewing can help you make a better decision. Mortgage brokers are an excellent source of information for deals specific to your area, contract terms, and their services require no out-of-pocket fees if you are well qualified.
Here at RATESDOTCA, we compare rates from the best Canadian mortgage brokers, major banks and dozens of smaller competitors.
Shivani Kaul is a communications professional specializing in editing, writing, and content strategy, with a particular focus on personal finance and mortgages. Her expertise stems from a strong educational background and diverse international experience.Academically, Shivani holds a Digital Marketing Management certificate from the University of Toronto, a Business Communications certificate from the University of British Columbia, a Master's degree in Mass Communication from Symbiosis Institute of Media and Communications, and a Bachelor's degree in English from the University of Delhi.
Her professional journey is marked by significant roles in prestigious media organizations across multiple countries. She has previously worked as an editor at PMNA/The Canadian Press for The Globe and Mail, Toronto Star, and freelance writer for the Investor's Digest of Canada. Additionally, Shivani has contributed her skills to reputed news media groups in India and the Middle East. Her expertise in SEO ensures that the content she produces not only engages readers but also achieves optimal visibility in digital spaces.
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