BMO Mortgage Rates

Founded in 1817, the Bank of Montreal is the oldest bank in Canada and its fourth-largest bank in terms of assets and market capitalization. The multinational bank is among the ten largest banks in North America and handles investments and financial services. Bank of Montreal has over 900 branches and serves more than seven million account holders.

BMO Fixed Rate Mortgages

A fixed rate mortgage involves a stable interest rate that does not fluctuate over the course of the loan’s term. Below are BMO’s current posted rates:

• 1 year fixed mortgage rate - 6.29%
• 2 year fixed mortgage rate - 6.19%
• 3 year fixed mortgage rate - 6.05%
• 4 year fixed mortgage rate - 6.04%
• 5 year fixed mortgage rate - 6.49%
• 6 year fixed mortgage rate - 6.75%
• 7 year fixed mortgage rate - 7.49%
• 10 year fixed mortgage rate - 7.29%

BMO Variable Rate Mortgages

A variable rate mortgage involves an interest rate that fluctuates based on a certain benchmark, usually a prime rate. Below are BMO’s current posted rates:

• 3 year variable mortgage rate - 8.15%
• 5 year variable mortgage rate - 6.45%

Note that the BMO Prime Rate is currently set at 6.45%. 

BMO Readiline

The BMO Readiline product is a hybrid financing tool that provides a mortgage and a line of credit. Individuals who made a 20% down payment on their new home, or have 20% equity in their current home, can borrow up to 80% of their home’s value. This amount can be split between a mortgage and line of credit using BMO Readiline.

Borrowers must pay regular installments towards the mortgage portion, either monthly, bi-weekly or weekly for a period of up to 30 years. For the line of credit portion, borrowers can pay down the balance at their own pace. The only amount that is due every period is the interest. Another benefit of this type of financing is the ongoing availability once you’ve been approved. It can be used for ongoing costs of homeownership, such as repairs, property taxes and so on.

BMO Mortgage Break Penalty

If your mortgage is closed, prepayment penalties will likely apply if you attempt to pay part or all of the balance early. Mortgages are a contractual obligation and if you make a payment early, you’re violating the contract which is why you could incur a prepayment penalty. Every bank’s prepayment penalty policy and fee varies.

You can calculate what your prepayment penalty will be using BMO’s Mortgage Prepayment Calculator. Even though you might incur a fee, it could still be worth the penalty which is why it’s important to understand the cost.

BMO Cash Account

BMO offers a unique feature for their mortgages called the Cash Account. Whenever you exercise your prepayment options, the funds go into the Cash Account within your mortgage. If you ever need cash, you can re-borrow prepaid funds, if you’re eligible, starting with a minimum of $2,500. Once you withdraw funds from the Cash Account, the amount is added to your mortgage principal at your existing interest rate for the remaining term.

How to Get a BMO Mortgage Pre-Approval

You can get a mortgage pre-approval with BMO that is valid for 130 days. When you get pre-approved, you will know how much you’re approved for and what interest rate BMO will offer. In order to get pre-approved with BMO, you must provide the following documentation:

• Government issued identification
• Employment verification, such as recent pay stubs, notices of assessment from the CRA or letters of employment
• Confirmation of income, such as recent pay stubs or bank statements
• Outstanding obligations, such as credit card, loans or other debts
• Owned assets, such as investments, leisure vehicles, real estate or other valuables

Keep in mind that BMO will assess your financial health while reviewing the above documentation. This includes assessing your credit score. Do what you can to improve your financial position before applying for a mortgage pre-approval with BMO to better your odds of approval.

How to Get a BMO Mortgage

If you’re ready to apply for a BMO mortgage, be prepared to provide the following documentation:

• Two pieces of government issued identification
• Employment verification, such as recent pay stubs, notices of assessment from the CRA or letters of employment
• Confirmation of income, such as recent pay stubs or bank statements
• Proof of the down payment funds
• The property listing for the home you’d like to purchase
• A signed offer of purchase

When applying for a BMO mortgage, the bank will definitely review your credit score and report as well. Do what you can to improve your credit and financial position before applying to better your odds of approval.

Using BMO Mortgage Specialists

BMO has a number of specialists you can consult, including mortgage specialists. The institution understands that the mortgage process is overwhelming which is why they offer personalized support and advice. You can meet with them at a time and place that works for you, including over the phone.

BMO Pros

• Big bank reputation. BMO is one of the largest banks in Canada. If you manage to get approved, you will likely have greater peace over your financing decision.
• Access to other services. As a BMO client, you can utilize their other services, such as bank accounts, financial advice or credit cards.
• Longest pre-approval period. BMO’s mortgage pre-approvals last 130 days. Most major banks in Canada only offer 120 days.
• Mortgage options. Even though BMO doesn’t offer the most competitive rates, the Readiline and Cash Account products are advantageous offers.

BMO Cons

• Lack of widespread advice. If you work with a BMO mortgage specialist, chances are they won’t have much knowledge about other offers available on the market. They can only advise you on how to get a BMO mortgage.
• Harder to qualify. As with all big banks, it is challenging to get approved with BMO because of their strict approval requirements.
• New to Canada. You may not qualify for a mortgage with BMO if you just emigrated to Canada.

What are the different kinds of rates?

Banks offer different kinds of rates for mortgages. All of Canada’s big banks usually offer three types of rates: inflated rates used for reference, contracts and penalties; rates they post online or advertise to customers as special or limited time offers; and rates they keep quiet about but are the best rates, normally these are negotiated.

Posted Rates

Posted rates are the rates used to determine penalty fees. As a result, these rates are inflated to get banks more money. No one should be paying posted rates on a mortgage. They are used for reference and customers can negotiate or seek out better advertised rates from there.

Special Mortgage Rates

Special mortgage rates are the rates normally offered online or in advertisements as a limited time deal. They are not limited time deals or special in any way. They are lower than posted rates and generally what mortgage specialists can outright offer clients. However, smaller lenders and credit unions generally offer more competitive rates than the big banks’ special rates. Seeking out comparable loans and their rates can put you in a position to ask for even better rates than what big banks offer you as “special”.

Discretionary Rates

Discretionary rates are the good deals big banks can offer, but won’t openly tell clients about or advertise publicly. Banks will offer these rates to preferred clients, because they don’t want to lose their business. Ultimately, banks want business and any client, preferred or not, can negotiate rates down into the discretionary category.