Compare BMO Mortgage Rates in Canada

The Bank of Montreal, or BMO, is one of North America’s largest banks and doubles as Canada’s oldest bank. BMO, regarded as one of the Big Five Banks in Canada and considered an A-lender, alongside other institutions like Scotiabank, CIBC, and nesto, offers an array of conventional residential mortgage products. This article will detail the significant mortgage solutions, rates, and flexible options BMO offers. 


Key Highlights

  • BMO offers convertible, open, and closed mortgages
  • BMO offers as much as 20% prepayment options on their mortgages
  • BMO’s renewal process is pretty straightforward; however, if you get a better rate elsewhere with a new lender, you can also renew your mortgage

Compare BMO Mortgage Rates

Here’s a detailed illustration of mortgage rates offered by big banks. This table shows the current BMO rates for various types and terms of the mortgage and how they stand when compared to multiple banks. When you are doing mortgage rates comparison, it is usually an excellent call to simultaneously compare rates from many lenders and keep an eye out for the lowest possible rate. This is especially important since it can effectively shave thousands off your mortgage throughout your term, and all you would have had to do would be minimal advance research. 

Compare Big Bank & Lender Rates

It can be time-consuming and frustrating to compare rates by yourself. With us, you can find everything you need in one convenient location. Also, ensure that you consider the mortgage product term length and type when comparing rates. For instance, if you are in the market for a fixed-rate mortgage, it is essential to examine the range of terms given by various banks, such as three-year and five-year offerings, and not just the interest rate.

How to Compare Bank Rates from Big Banks

When you are trying to find the best mortgage rate for your home, it is important to compare the different kinds of lenders. Conventional lenders like the Canadian Big Five Banks (BMO, TD Bank, CIBC, RBC, and Scotiabank) often have some of the lowest rates available. However, there are also other private and alternative lending options that may be worth exploring depending on your particular circumstances. It is wise to research all the choices and understand their respective terms before making a decision.

The most practical way of comparing rates is by reviewing offerings from multiple lenders simultaneously to see what you can get. You want to ensure that your mortgage solution is best suited to your situation. This is where knowledge of the pros and cons of fixed versus variable rate mortgages and the other various mortgage types in Canada would come in handy.

BMO Overview & Stock Information

The Bank of Montreal dates back to 1817, when it was founded and was the first bank in Canada. Today, the bank caters to in excess of 10 million individuals, institutions, and corporations worldwide, with its main customer base in North America.

Given that it is one of the Big Five Banks, BMO is a common choice for Canadian residential mortgages, whether BMO variable rate mortgage or BMO fixed mortgage rates like the BMO five-year fixed.

Listed as BMO on the stock exchange, company shares have traded between $125.00 and $150.00 Canadian in the last year, with share value seeing a steady and gradual downward trend since last year. Darryl White is the company’s CEO and has been in this position since November 2017.  

BMO 5-Year Fixed and Variable Rate History

BMO ranks as one of Canada’s largest banks and has consistently offered competitive mortgage rates for both the BMO variable rate mortgage and BMO fixed mortgage rates. Presently, BMO’s variable rate 5-year mortgage is 6.70% while the BMO five-year fixed is 6.49%. 

Through the years, BMO’s 5-year variable and BMO five-year fixed mortgages have toed the path of national trends concerning falling and rising interest rates that the Bank of Canada sets.

You can convert BMO variable rate mortgage into a BMO fixed mortgage rates at any point in time; however, if you are switching from BMO variable rate to BMO fixed mortgage rates, you may not get the best rate instantly. 

BMO Mortgage Products

BMO has an array of mortgage solutions ranging from BMO variable rate mortgages to convertible to BMO fixed mortgage rates. They also offer decent conventional residential mortgages, fair prepayment flexibility, and competitive rates. Here’s a detailed look into the main residential products that BMO offers:

Fixed Rate Closed Mortgage

BMO provides the option of fixed rate closed mortgages which ensures that your interest rate is locked in for the duration of your mortgage term and implies your monthly payments remain unchanged in spite of interest rate fluctuations. BMO offers terms ranging from 1 to 10 years, with 5 and 10 year terms having the Smart Fixed option. Rates may also vary based on whether your amortization period is less or more than 25 years. 

Open Fixed Rate Mortgage

BMO’s open fixed rate mortgage offering is practical if you plan to make prepayments that exceed 20% of your initial mortgage principal or if you intend to sell the home shortly. This option usually features a higher interest rate to compensate for this extra flexibility. 

Variable Rate Mortgage

A variable rate mortgage sees monthly payments unchanging.

In contrast, the portion of the payment toward your principal would vary with BMO’s prime lending rate, such as BMO prime rate today. Historically, variable-rate mortgages like BMO variable-rate mortgages do better than fixed-rate mortgages such as the BMO 5-year fixed when it comes to total repayments. However, a significant fluctuation in interest rates may see your payments increase significantly. BMO provides for 5-year closed and 3-year open BMO variable rate mortgages. 

Convertible Fixed Rate Mortgage

A convertible fixed-rate mortgage has somewhat similar perks that a closed mortgage does; however, it includes the flexibility of switching to a more extended fixed-rate term of a year or more while avoiding the prepayment charge. Convertible mortgages are a good call if you want to alter your term shortly after your home purchase or if there is some evolution in your financial situation. 

BMO Homeowner ReadiLine®

BMI Homeowner ReadiLine® is a combination of a mortgage and a line of credit. This product allows you to borrow as high as 80% of your home’s value, alongside the option of splitting between a line of credit and a mortgage. While you pay off the mortgage, the portion that goes towards the principal would in turn increase the limit placed on your line of credit. If you are looking to use the equity built for home improvements or consolidate debt at a reduced interest rate and then pay them off with your credit line, then this is a great option.  

BMO Mortgage Payment Increases

Prepayment of your mortgage can be an attractive option if you must take control of your financial obligations. Whether it’s by making lump sum payments or increasing your monthly payments, prepaying your mortgage can help save you money in interest and quickly cut down the length of your loan term. Major banks like BMO provide plenty of flexibility when it comes to different prepayment options. For instance, BMO offers generous prepayment limits of up to 20% on many of its mortgage products.  

The mortgage payment increase options that BMO offers include the following: 

Accelerated payments

BMO allows you to increase your mortgage payment once every calendar year (based on your mortgage type) by as high as 10% if you opt for a BMO Smart Fixed Mortgage, or 20% if you go for any other type of BMO closed mortgage. 

As an alternative, you can choose to make lump-sum prepayments on an annual basis without incurring a prepayment charge, with up to 10% of the initial mortgage sum for a BMO Smart Fixed Mortgage, or 20% of the initial mortgage amount for other BMO closed mortgage options. 

Increased payment frequency

To help save money in the long run, BMO customers can switch from monthly mortgage payments to a sped-up weekly or bi-weekly schedule. 

Increased payment and reduced amortization:

You can increase your mortgage payments (interest and principal) up to 20% (10% if you opt for a BMO Smart Fixed Mortgage) without incurring an extra charge. BMO customers have this opportunity once each calendar year. Increasing your monthly payments would cut back your amortization period and reduce your interest costs. 

BMO Annual Mortgage Prepayment

Here’s a detailed analysis of the Big Banks and what they allow as prepayment amounts. It is apparent that BMO offers one of the largest prepayment amounts compared to other big banks (20%); however, the BMO’s prepayment amounts would vary based on the term and type of your mortgage. For instance, BMO Smart Fixed Mortgage only has a prepayment amount of 10%, instead of 20%. 

Canadian Bank Closed Mortgage Prepayment Amounts
RBC10%
TD Bank15%
Scotiabank15%
BMO20%
CIBC20%
National Bank10%

Renewal Process with Big Banks

If you have a BMO mortgage whether a BMO variable rate mortgage or a BMO fixed mortgage rates and you’re renewing with the same lender, the process would involve contacting the bank directly to review the options available to you. 

However, during the renewal process, you may have questions pertaining to whether you necessarily have to renew your mortgage with the bank you presently use. 

The answer to this is no. You can choose to renew with another bank or mortgage provider at the end of your term. If you intend to renew your present BMO mortgage with another lender, then it would be a good call to shop around to possibly find better terms and rates that would be more ideal for your situation before you go ahead to renew with the same lender.

At comparemortgages.ca, we help in getting the best rates possible for your mortgage.

Frequently Asked Questions

Here are the most frequently asked questions about BMO’s mortgages and rates.

Are BMO rates lower than other big banks?

BMO mortgage rates have been more or less competitive with the other 5 Big Banks. 

What are the benefits of choosing a smaller lender?

Specific small lenders, such as credit unions and some alternative lenders, may offer rates lower than those of big banks like BMO. However, these lenders, such as big banks and other A-lenders, usually have more stringent lending criteria. They can offer lower rates than other lenders because they go for less risky borrowers. Small lenders may be able to cater to borrowers in tricky circumstances such as poor credit or unique employment situations. However, they would typically charge a higher interest rate than BMO interest rates and other lenders’ in return. 

How do I get a mortgage with BMO?

BMO recommends reaching out to one of their mortgage advisors to discuss your loan. The bank provides rapid online pre-qualification tools and you can begin the mortgage application process with BMO online. At nesto, they can help with comparing the best BMO mortgage rates or BMO interest rates and putting them up against those of other big banks to find the best rate available, and they also do direct lending. 

Final Thoughts

BMO comprises one of the Big Five, or Big Six banking institutions in Canada, as it is one of Canada’s largest and oldest banks. The bank offers a range of conventional mortgage products for residential customers, and the BMO mortgage rates or BMO interest rates typically align with those of A-lenders and other big banks. BMO provides various prepayment options for a good number of their mortgage products and a degree of flexibility in the form of open and convertible mortgages.