BMO Says Lock In Now

BMORoughly 33% of Canadians surveyed “complained they have lost sleep due to the stress of trying to buy a new home.” That’s according to a BMO survey.

To ease the anxiety, BMO is “advising Canadians to lock-in now.”

BMO is keeping its 3.75% “low frills” 5-year fixed rate live for the time being. No word on when it will expire.

There aren’t many 5-year rates below 3.75% left. Most other lenders are now above 4% on a 5-year fixed.


Survey Details: The Harris/Decima online poll was conducted from February 16th to 22nd, 2010 and is based on a sample of 1,000 Canadians between the ages of 25-45 years, who are either current home owners (who currently have a mortgage on their home and needed one when they purchased their home) or are planning on purchasing their first home in the next 12 months, and at least share in their household's financial decisions.

  1. I have heard that many lenders have already starting converting their systems to be in compliance with the April 19th rules for mortgage qualification. (5 year rate)
    Questions for Rob and other Mortgage Brokers…
    – Are you finding that lenders are already using the new rules when issuing pre-approval letters in order to avoid misunderstandings with the client after April 19th?
    – I want to get a variable mortgage with the maximum loan possible. Is it still possible to get a pre-approval letter, based on a 3 yr. fixed mortgage (old rules) or do I need to bring a firm purchase offer to the lender prior to April 19th.

  2. Hi LFA,
    If a pre-approval turns “live” after April 18 (i.e., the borrower purchases the home and asks the lender for a firm approval after April 18) then his/her variable-rate mortgage will be qualified at the posted 5-year fixed rate at the time. That rate is 5.85% today.

  3. Discounted variables continuing to improve – a few lenders down to Prime – .6 now I hear.
    Any correlation with the rise in fixed rates?
    Time to break for anyone with a prime plus variable – gotta love no IRD!

  4. No *direct* correlation. Adjustable rates is based on prime, which is based on the BoC’s overnight rate. Fixed mortgage rates move in tandem with bond yields. So, it’s quite possible for one to go up and the other to go down. One of the reasons why bond yields have inched upwards is because of the expectation by investors that the BoC would raise rates at the end of this quarter.

  5. Regarding the BMO offer, I cannot believe they’re still offering it. I’m willing to bet these are just shell applications. Firstline was the last lender through the broker channel to raise rates. Everyone else have increased their rates and BMO hasn’t?! I’m willing to bet the fiesta will be over this week.

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