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The BMO 2.99% 5 Year Fixed Rate Analyzed

 
In a recent article in the Globe & Mail this is how they described the BMO offer:
 

"What BMO is offering until April 17 is a competitive rate in a mortgage with uncompetitive terms. Most importantly, you can’t break this mortgage before it comes up for renewal in five years unless you sell the property, refinance with BMO or do an early renewal into another BMO product. All the usual prepayment penalties would apply in these situations. Veteran mortgage broker Vince Gaetano’s summary: “You’re handcuffed.”

Other issues:

-BMO will hold the rate for 90 days, compared with 120 days at some other lenders.

-You can prepay 10 per cent of the mortgage annually without penalty and increase your payment by 10 per cent a year; 20 per cent is the usual standard for both types of payment increase.

-The skip-a-payment option – a bad idea, admittedly – is not available.

-The maximum amortization period is 25 years; you can typically go up to 30 years if you have a down payment of 20 per cent or more."

I personally don't think it's worth it. There are better and more flexible mortgage terms out there for similar rates including  the following:
 
4 year fixed at 2.87%
5 year fixed at 3.04%
 
 
5 year variable at Prime - .50% or 2.5%
 
Tony
 
Tony Marchigiano1-155 Water Street
Mortgage BrokerVancouver, BC
 

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