Bank of Montreal Mortgage Rates & Reviews
BMO Bank of Montreal Background
The Bank of Montreal (TSE: BMO) is the fourth largest bank in Canada in terms of assets and market capitalization, and is recognized as one of the big 5 banks in Canada. BMO is known as a tier 1 bank, and as of July 2021 the market capitalization of BMO stock was over $80 billion, making the bank one of Canada's largest companies. BMO was founded in Montreal, Quebec in 1817 and was previously known as The Montreal Bank before the name was changed to The Bank of Montreal. BMO operates on a global scale with locations in countries such as: the USA, England, Switzerland, Germany, China, Singapore and India, in addition to its main presence in Canada. BMO provides a diversified portfolio of financial services to customers with business lines such as: retail banking, wealth management, commercial banking, capital markets, and insurance. Through BMO’s 900 Canadian branches and with over 42,000 employees worldwide, the bank serves 7 million customers.
BMO Fixed Mortgage Rates
A BMO fixed rate mortgage protects you from the risk of future interest rate fluctuations, by allowing you to keep your current BMO mortgage rate for the life of your mortgage term. This can give you peace of mind knowing that even if the BMO prime lending rate changes, you will still have the same interest rate. If you are arranging a new mortgage for a future or current home, your BMO fixed interest rate can be guaranteed for up to 130 days before the closing date of your home. If interest rates do go up during that time period, you will still be guaranteed the lower rate.
| Term | Rate | Monthly Payment |
|---|---|---|
1-Year Fixed | 2.79% | $1,853 |
2-Year Fixed | 2.94% | $1,884 |
3-Year Fixed | 2.69% | $1,833 |
4-Year Fixed | 4.09% | $2,131 |
5-Year Fixed | 2.82% | $1,860 |
6-Year Fixed | 5.24% | $2,395 |
7-Year Fixed | 5.40% | $2,433 |
10-Year Fixed | 4.49% | $2,221 |
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time.
BMO Variable Mortgage Rates
A BMO variable rate mortgage will provide you with the stability of having fixed payments over your mortgage term; however, the interest rate will move with any changes to the BMO prime rate. If the bank prime rate BMO offers goes down, more of your payment will go towards paying off your principal. However, if BMO’s prime rate goes up, more of your payment will go towards your interest costs. As a result, this can be a great financial tool for those expecting BMO rates to fall in the upcoming year. Another option that gives you the ability to have a variable rate mortgage while letting you convert to a fixed rate mortgage at any time is a convertible mortgage. This will give you both security and flexibility, as it lets you convert to a fixed term should BMO variable mortgage rates no longer meet your needs.
| Term | Rate | Monthly Payment |
|---|---|---|
5-Year Variable | 1.65% | $1,628 |
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time.
BMO Mortgage Break Penalty
| Bank or Lender | Variable Rate Mortgage | Fixed Rate Mortgage |
|---|---|---|
 | 3 Months’ Interest | Greater of 3 Months’ Interest or the IRD amount |
Difference in interest payable between the interest amount that you owe between the time of payment to maturity, calculated using your current mortgage rate, and the interest amount that you owe between the time of payment to maturity, calculated using BMO’s current posted rate for a comparable mortgage, reduced by any rate discount that you received.
To see how much you can expect to pay in prepayment charges, utilize the BMO mortgage penalty calculator below:
BMO Mortgage Prepayment Calculator
Are you looking to pay off your mortgage early? Or refinance the terms of your mortgage at a lower interest rate? Maybe you sold your home and purchasing a new home, in which a mortgage transfer will apply. Whatever the case, you most likely will have to pay a mortgage break penalty set by your lender. Whatever the situation, our calculator will help you determine the cost to break your mortgage so you can be confident about your mortgage decisions.
What is the remaining balance on your mortgage?
What is the term-length and type of your current mortgage?
What is your current mortgage interest rate?
If applicable, what was the rate discount you received when you signed your current mortgage agreement?
When did your current mortgage start?
Who is your current mortgage lender?
What is TD Bank's current interest rate for a 3-year fixed rate mortgage?
How is my mortgage penalty calculated?
BMO Posted Rates
BMO posted mortgage rates are the official rates the bank will use when determining your mortgage break penalty, which is the fee you will pay if you want to break or refinance your mortgage early. Although the posted rate is the rate banks are willing to offer normally, your payments, interest, and mortgage stress testwill be based on a different BMO mortgage rate that is usually lower than the posted rate. This is because banks will offer deals and will leave room to negotiate when you are actually getting a mortgage.
How Is The BMO Penalty for Breaking a Mortgage Calculated Using Posted Rates?
Similar to other Canadian banks, BMO uses the Interest Rate Differential method, which uses the difference between the interest rate that you have currently (minus any discounts you got), and the current posted interest rate. The current posted interest rate that BMO will use is the one with a similar term to how long is left on your mortgage term. Using the difference, BMO multiplies this difference by your mortgage balance left and by your term length left. This results in how much you will pay in a mortgage break penalty, as long as it is higher than 3 months worth of interest at your current Bank of Montreal mortgage rate.
| Term Length | BMO Posted Rate |
|---|---|
| 1-Year Fixed | 2.79% |
| 2-Year Fixed | 2.94% |
| 3-Year Fixed | 3.49% |
| 4-Year Fixed | 4.09% |
| 5-Year Fixed | 3.99% |
| 6-Year Fixed | 5.24% |
| 7-Year Fixed | 5.40% |
| 10-Year Fixed | 4.49% |
BMO Bank of Montreal Prime Rate
The prime rate that BMO offers acts as the basis for most loans and credit products the company has. The way the BMO prime rate determines your actual interest rate is by adding or subtracting a spread to the prime rate, as a way to either make the rate higher than the current prime rate, or lower. Usually for products that offer the bank higher risk or do not have collateral, such as a BMO credit card, a personal BMO line of credit, or a BMO auto loan, it's likely the bank will offer loans that add on to the current prime rate. For safer loans such as a mortgage, where the home is the collateral, BMO mortgage rates may either add a very small spread to the prime rate, have no spread at all, or even subtract a spread depending on your mortgage term.
Common products that BMO offers that utilize the prIme rate when determining the overall interest rate to charge include: HELOC’s, mortgages, credit cards, personal and student line of credits, auto loans, investment loans, and home improvement loans.
Current BMO Bank of Montreal Prime Rate: 2.45%
BMO Bank of Montreal Prime Rate History
BMO Readiline®
The BMO Homeowner ReadiLine product is a combination of a BMO mortgage and a BMO HELOC. If you have a 20% down payment or have built equity in your home already, you can borrow up to 80% of your home's value between a mortgage and a line of credit. One of the features of Homeowner ReadiLine is that your HELOC's credit limit automatically increases as you make mortgage payments, allowing you to quickly tap into your home equity as you pay down your mortgage. Another benefit of BMO’s Homeowner Readiline is your ability to make interest only payments on the line of credit, which can provide you flexibility in how you use this line of credit.
With ReadiLine using the equity in your home to offer a lower interest rate, you are able to use the money in many ways, with options such as:
- To consolidate higher interest debts,
- Renovate your home,
- Invest in other assets,
- Cover short term expenses, and
- As a way to pay for education costs
The process to set up your BMO Homeowner Readiline is simple, starting when you meet with a mortgage advisor for either a new mortgage or to add on a BMO home equity line of credit. You will need to bring some documents such as government issued ID and proof of employment, among other documents depending on your situation. Then after you have set up Homeowner Readiline, you will have access to your line of credit through your bank account online or through your BMO bank branch.
| Program | Term Length | Type | Rate |
|---|---|---|---|
| No results. | |||
Other Bank of Montreal Mortgage Products
BMO Self-Employed Mortgage
If you are self-employed or work a commission based job, you will have the same options as someone who is not self-employed. However, the main difference will be the documentation that you need to get a self-employed mortgage. In addition to the standard documents that everyone will need to get a mortgage, such as information about the property, and confirmation of a down payment, you will also need the following information:
- Last two years of tax returns,
- Last two years of Notice of Assessments, and
- One of the following documents:
- Audited business financial statements,
- Statement of business activities for your last two tax years,
- Financial statements with a review report done by an accountant, or
- Notice to reader financial statements done by a professional accountant
BMO Investment Property Mortgage
If you are looking to purchase an investment property with a BMO mortgage and are not occupying part of the property as your permanent residence, you will need at least a 20% down payment. However, if you plan on living in part of the property, you may be able to get mortgage insurance and put as little as 5% down. Besides just your down payment and how your mortgage will be covered, other things to consider when purchasing an investment property are:
- The Price: An investment property is usually valued based on comparable properties and off of a calculation called a capitalization rate, which is the operating income a property brings in, divided by the property’s price. Higher cap rateswill mean that you will have more money coming in as income from rent compared to the price you paid on the property, and lower cap rates will mean the opposite. This means that finding a property that has a reasonable cap rate is important, and can help you pay down your mortgage quicker and build more equity.
- The Location: Purchasing a property in a neighborhood that is in-demand, safe, and has good amenities and job opportunities will make renting your property much easier, and over time may help the property appreciate in value.
- Your Expenses: As a landlord you will be responsible for many expenses, which may include: property management costs, home insurance, utilities, and property taxes.
BMO US Mortgage
If you are looking to purchase a property in the US as a Canadian, a BMO cross border mortgage can make the process much easier with the ability to leverage your Canadian credit history. This is possible because of BMO’s presence in the US as the BMO Harris Bank. This is very important if you do not have any credit history in the US or have very limited US credit history. Without the ability to leverage your Canadian credit history, you may not be able to get a mortgage, or may require a very high down payment. To be eligible for a BMO Harris mortgage in the US, you will need to bank with BMO already, then you will have access to both fixed rate and adjustable rate mortgage products and a mortgage up to $2 million (USD).
Some of the documents you will need to get a BMO Harris mortgage are:
- Your T1 income tax returns and Notice of Assessments,
- Proof of income depending on your income sources, which may include:
- Your last 2 years of T3 & T5 slips for investment income,
- Pay stubs and 2 years of T4 slips if you are a salaried or hourly employee,
- 2 years of business tax returns if you are self-employed, or
- Your most recent retirement letters if you have retired
- Your social insurance number and passport,
- Account statements with your assets, and
- Property tax and home insurance premiums on other properties you own
BMO Mortgage Features
Accelerating your Mortgage Payments: BMO offers 2 ways to help you pay more money towards your mortgage:
1. Increase Your Mortgage Payments: Every calendar year BMO will allow you to increase your monthly mortgage payment depending on your mortgage terms and conditions. Your regular monthly payment can be increased by up to 20%, while for a BMO Smart Fixed Mortgage, you can increase it by up to 10%. This will help you be mortgage free faster by letting you put more money towards your mortgage balance each month, which will save you money in interest payments over your term.
2. Make a Lump Sum Payment: Another way to allocate more money towards paying down your mortgage balance is by making a lump sum payment, which BMO allows you to do once per year without incurring a prepayment penalty. If you have a regular BMO mortgage, you are eligible to make a lump sum payment for up to 20% of your original mortgage balance, while if you have a BMO Smart Fixed Mortgage, you can prepay up to 10% in a lump sum payment. This will help you pay much less interest, because this lump sum payment will go directly to paying down your mortgage balance.
Increase Your Payment Frequency
You are able to increase how often you will pay your BMO mortgage payments, which can help save you interest over your mortgage term. You have three payment frequency options: monthly, bi-weekly, and weekly. The way you save money on interest by paying more frequently is because you are reducing your mortgage balance more often, rather than once per month. This means you will have less of a balance that is collecting interest each month. Over time, this can help you become mortgage free faster.
BMO Mortgage Protection Insurance
As an add-on feature, BMO offers mortgage protection insurance products such as mortgage life insurance, critical illness insurance, disability insurance, and job-loss insurance. The way these coverages work is if you have coverage and if what the coverage is protecting against happens, you will get part or all of your mortgage paid off. The biggest appeal of adding BMO mortgage protection insurance is to give you the peace of mind that if something happens to you, that your family will be able to remain in your home. Other benefits of the offerings that BMO has is that your payments will not increase over time, and the process of getting covered is much easier than getting term or whole life insurance. Some of the downfalls of getting mortgage protection insurance is that your coverage will naturally decline as your mortgage balance is paid off, along with the lack of flexibility in where you can use the money, with the payout automatically going towards your mortgage balance.
Property Tax Payments
As a requirement in most mortgage contracts, you will need to pay your property taxes monthly through BMO. This is common across all banks, where you will pay 1/12th of the estimated property tax amount owed on your home to BMO each month, and in return, BMO will use this money to pay your property taxes on your behalf. The reason why BMO requires this is to reduce the risk of you not paying your property taxes. If you were to not make your property tax payments, the municipality will place a lien on your property, which will automatically mean the city is to be paid back ahead of your bank in the event you default. In order to protect themselves, BMO will have you pay through them, although you may not be required to pay property taxes through the bank depending on your mortgage terms. Even if you are not required to pay through BMO, you will still have the option to pay through the bank, which could be beneficial to help you budget and remember your payments.
BMO Mortgage Contact
BMO gives you the ability to get more information about a mortgage either online, in person at one of the 900+ branches in Canada, or over the phone through the number: 1-877-225-5266. If you are unsure about branches close to your location or want to learn more about each branch before making an appointment, the BMO branch locator can help. It will give you the BMO branch hours of operation, features each BMO branch has, directions to the branch, the languages that are spoken at the branch, and the option to book an appointment.
BMO Mortgage Reviews
Using reviews collected from third party websites such as InsurEYE, and WalletHub, we were able to get a better understanding of what it is like getting a mortgage and banking with BMO. Although most reviews are for the Canadian operations, some of these reviews may be related to the BMO Harris bank US operations.
InsurEYE: 3.7/5 from 48 reviews
WalletHub: 3.9/5 from 636 reviews
Pros & Cons of BMO
| ✔ Pros | ✖ Cons |
|---|---|
| You can leverage your Canadian credit history to get a mortgage in the US much easier. | Mortgage rates may be higher than other smaller lenders. |
| Extensive branch network with over 900 locations across Canada make speaking with a representative easy. | Similar to other big banks, BMO mortgage representatives can only show you BMO products, making it harder to compare your options. |