Bank of Montreal, or BMO, is the fourth-largest bank in Canada by market capitalization of $85 billion in December 2022 and assets. With over 200 years of history, BMO is the oldest bank in Canada, founded in 1817 in Quebec as Montreal Bank. BMO serves more than 12 million customers worldwide. It is a tier 1 bank and one of Canada's big banks, a well-established, highly profitable flagship banking business. Moreover, this premium commercial banking franchise has made it to a Top 5 market position in North America.
In Canada, BMO operates as BMO Bank of Montreal, and in the US, as BMO Financial Group.
BMO Financial Group owns BMO Harris Bank, the United States personal and commercial banking services provider. Bank of Montreal also operates in the UK, Switzerland, Germany, China, Singapore, India, Mexico, Barbados, Brazil, and Australia.
Bank of Montreal is a digital-first operating model combining business and technology in its online banking platform and mobile banking app. BMO account enables you to access everyday banking features like bill payments, e-Transfers, bank statements, and more. Also, you can save time by filing taxes and making payroll source deductions from the comfort of your home.
Bank of Montreal provides personal and commercial banking, wealth management, and investment services to individuals, businesses, and institutions. Personal BMO banking services include credit cards, loans, insurance, and mortgages.
Whatever your housing goal—get mortgage-free faster, save money through a new mortgage with competitive rates, get access to a revolving line of credit—BMO promises to facilitate the mortgage process that can seem overwhelming. There are mortgage options for clients whose objective is to buy their first home, next home, or an investment property, to refinance, renew or switch their current mortgage.
You can start house hunting with BMO mortgage pre-approval. First, fill out a straightforward form asking you to specify your mortgage goals, the product you already have with BMO, and several pieces of your personal information, such as your name, phone number, and postal code. At any stage, a BMO Mortgage Specialist can provide you with personalized expert advice and a home financing plan tailored to your needs. You can also indicate whether you need a real estate agent who can perform a personal search for your property, negotiate the rates, and much more.
If you want an idea of your monthly mortgage payment, you could take advantage of a BMO mortgage payment calculator. Enter your home price, mortgage term, interest rate, amortization period, and payment frequency, and choose whether you want to pay off your mortgage faster with additional payments. Apart from the payment amount, you will also find out how interest payments affect the total cost of your mortgage.
BMO offers fixed-rate and variable-rate mortgages, so it could be helpful to recollect the difference between these products. Variable mortgage rates give you an opportunity to pay off your home faster if the prime rate falls. This is because BMO mortgage rates fluctuate together with BMO's prime rate, while your monthly fixed payments remain the same throughout the term. On the contrary, rising interest rates can extend the amortization period, as, during the term, you will pay more money towards interest. A fixed mortgage rate protects you against higher interest rates, so you'll know exactly how much of your mortgage you'll pay off over your term.
Besides conventional mortgages, BMO offers home equity loans allowing you to tap into your home's equity to have your significant purchases and projects covered. You can borrow up to 80% of your home's value.
Types of BMO mortgages
Fixed-rate mortgages
With a fixed-rate mortgage, your rate won't change during the entire term. Once pre-approved, BMO will lock the pre-approval rate for 130 days for you. Fixed-rate mortgages from BMO can be both open and closed. An open mortgage allows you to pay it off early penalty-free, though your interest rate will be higher. You can secure a lower rate with a closed mortgage, but there might be prepayment penalties. Still, BMO offers certain penalty-free options to pay your closed mortgage faster:
-
By increasing your monthly payments by up to 10% for a Smart Fixed Mortgage and by 20% for other kinds of closed mortgages once a year
-
By making a lump-sum prepayment of up to 10% of the original mortgage amount for a Smart Fixed Mortgage and up to 20% of the original mortgage amount for other kinds of closed mortgages once a year
-
By switching to a weekly or bi-weekly payment schedule
The terms for fixed-rate open mortgages range from 6 months to 18 years, and for fixed-rate closed mortgages — from 1 to 10 years.
Variable-rate mortgages
A variable-rate mortgage assumes that your rate fluctuates according to the BMO prime rate. If the prime rate decreases, your interest rate will also do. If needed, you can switch to a fixed rate during your mortgage term. BMO variable-rate mortgages can be both open and closed. The special APR for a 5-year variable-rate closed mortgage is 4.37%.
Homeowner ReadiLine
If you need to renovate property after purchasing, consider BMO Homeowner ReadiLine — a mortgage combined with a line of credit. As you pay down your mortgage, your available line of credit grows automatically.
With Homeowner ReadiLine, you can borrow up to 80% of your home's value and distribute this amount between a mortgage and a line of credit the way you want. You can choose between a fixed and variable rate for a mortgage portion.
BMO mortgage rates
BMO has a special page dedicated to posted rates and special offers. It might be beneficial to review this page from time to time because special offers are limited in time. Moreover, on this page, you can compare several rates, calculate your monthly and down payment, and define what you can afford through special tools and calculators.
Here is the recap of Bank of Montreal mortgage rates for mortgages with an amortization period under 25 years.
Fixed-rate closed mortgages:
-
1-year 6.290%
-
2-year 6.190%
-
3-year 6.050%
-
4-year 6.040%
-
5-year 6.490%
-
5-year Smart Fixed 6.390%
-
6-year 6.750%
-
7-year 7.000%
-
10-year 7.490%
-
10-year Smart Fixed 7.290%
Variable-rate mortgages
-
3-year (open) 8.150%
-
5-year (closed) 6.450%
Convertible fixed-rate mortgage
-
6-month 6.340%
Fixed-rate open mortgages:
-
6-month 9.150%
-
1-year 9.150%
Suppose you are after a mortgage renewal or refinancing, seeking to adjust your mortgage commitment to your changing life circumstances or to help you pay your mortgage faster. In that case, BMO promises to make things easier for you. Secure your personalized mortgage renewal or refinance BMO rates for 130 days through the pre-approval form.
BMO mortgage insurance
Optional mortgage protection insurance is designed to help you pay off your mortgage if you face tough times, such as disability, death, job loss, or critical illness. In addition, it relieves the pressure on you or your family by paying part or all of your outstanding balance to your lender.
The mortgage protection insurance you choose can help care for your mortgage balance up to a certain amount.
BMO mortgage features
BMO mortgage comes with several attractive features:
-
Locked-in premiums depend on your age and mortgage balance
-
Flexible coverage options of 50% or 100%
-
Straightforward application and quick approval
Life insurance
Life insurance can help pay off partly or in full your outstanding mortgage balance if you were to pass away.
Insure up to a maximum of $600,000 per mortgage account. Choose between 50% or 100% coverage of your balance.
Canadian residents between 18 and 65 years old, borrowers, or co-borrowers on a mortgage can apply.
Critical Illness Insurance
Critical illness insurance can help concentrate on your health and cover your mortgage balance if you were to be diagnosed with one or several of the following covered critical health issues: life-threatening cancer, stroke, heart attack, or coronary artery bypass surgery.
Critical illness insurance allows you to choose between 50% and 100% coverage. You can count on up to $450,000.
Canadian residents between 18 and 55 years old applying for or already possessing life insurance can apply.
How to apply for a BMO mortgage
Before applying for a BMO mortgage, there is an option to get pre-approval. Once pre-approved, you will clearly understand how much you can borrow, and BMO will secure the pre-approval rate for 130 days for you. However, according to available information, this implies a review of your financial information and credit history.
You can proceed with getting mortgage pre-approval online through the BMO website. Click the "Get pre-approved" button and fill in the form with the following information:
-
Mortgage information — a purchase price, a down payment, a term, and monthly expenses (if applicable)
-
Your personal information — your first name, last name, date of birth, and SIN
-
Your contact information — your phone number, email, and address
-
Your employment information — your employment status, occupation, company name, source of income, and annual pre-tax income
-
Support payments (if applicable)
Once you complete the pre-qualification form, allow some time for one of the BMO mortgage specialists to review your information and get back to you with the mortgage conditions. Then, to proceed with your mortgage application further, you will need to schedule a visit to a BMO branch.
Alternatively, you can skip the pre-qualification step and book an appointment with a BMO expert to apply for a mortgage right away.
However, it might be an advantageous idea to have your financial information on hand before you start your application and get your BMO mortgage rate:
-
Your monthly income before taxes
-
Your monthly housing expenses or your rent (if applicable)
-
Savings or property value (if applicable)
-
Credit cards/lines of credit or loans, the outstanding balances, and monthly mortgage payments, including property taxes
-
Financial information of your joint applicant
Requirements
To apply for a BMO mortgage, you must be a Canadian resident of the age of majority in your province or territory and employed for at least two years. You must also be applying for a mortgage for a home you are going to live in.
When applying, you will need to provide information about your gross annual income for the current and the previous year (or the yearly gross income of all applicants if you have a joint application).
Providing a Social Insurance Number is optional, though it can help speed up the approval process.
Pros and cons
Pros
Let's outline the pros of BMO mortgages:
-
An opportunity to secure your pre-approval rate for 130 days
-
A variety of available terms
-
Special mortgage rates are available
-
An opportunity to repay a mortgage faster by increasing mortgage payments or making lump-sum payments once a year penalty-free
Cons
Still, there are certain cons to be aware of:
-
You may incur a prepayment penalty with closed mortgages when exceeding the allowed prepayment amount
-
A requirement to get mortgage default insurance in case of making a down payment of less than 20%
How to make a BMO mortgage payment
There are several ways to pay for your BMO mortgage:
-
Through online or mobile banking
-
By phone
-
In person at your local BMO branch
-
At a BMO ATM
Prepayment options
The type of mortgage you choose defines whether you will incur a prepayment charge or not. From this point of view, mortgages can be classified as open or closed. BMO offers both types.
An open mortgage and the revolving portion of the Homeowner ReadiLine suggest that you can prepay all or part of your outstanding balance at any time without a prepayment charge.
The following applies to closed mortgages and the installment portion of the Homeowner ReadiLine: there are flexible prepayment options letting clients pay down extra cash towards their mortgage principal without prepayment charges.
Options to increase your mortgage payments:
-
10% of the current mortgage payment amount for a smart fixed closed mortgage
-
20% of the current mortgage payment amount for any other kind of closed mortgage
