Posted by: Dave Currie
A product that the market has seen before, the 2.99% mortgage from BMO, has once again been reintroduced and will likely be advertised heavily to Canadians; however, there isn’t anything particularly unique about it. Some observers may recall that the 2.99% offers from BMO and Manulife Financial even prompted a phone call from the Finance Minister at the time, Jim Flaherty, looking to step in and quell any concerns of a market bubble.
As previously discussed on the MonsterMortgage.ca website, the 2.99% BMO mortgage is not the lowest rate in the market, it does however, represent the lowest advertised fixed rate mortgage among Canada’s largest banks. Banks often times advertise “posted rates”, interest rates significantly higher than Canadians might realistically get in the market and then negotiate down their rates with their clients.
Although the lowest advertised rate among the biggest banks in Canada, other mortgage lenders have offered similar mortgage rates to Canadians for a few years now – and often with fewer restrictions and fine print. The 2.99% interest rate advertisement does however signify to the market that 2.99% perhaps might be the benchmark for 5 year fixed rate mortgages in the short term. The rate reintroduction also signifies the competition among Banks and other lending institutions in Canada for mortgage origination and business – which typically results in better products for Canadians.
It remains to be seen whether or not the media coverage and attention will be as notable as in previous offerings.