PLEASE. . Exercise care before jumping into "new" 2.99 Percent mortgages

[tjthemanto]

not to mention that with the BMO 2.99% 5 Year you are stuck with them for 5 Years and can only refinance with them and not another lender. No one can predict where they will be in the future so having restrictions like this can really cost you a lot. Also I'm sure if you do need to refinance during the term your rate will be significantly higher because they have you by the tail! Many other lenders don't have the refinancing clause and offer great rates and flexibility.

I agree the 4 year 2.99 % matching offers from the other parties like TD, RBC etc might be a better offer due to less restrictions.

The penalties with BMO will be huge if you decide to break

[Brynhilde]

Great thread!

[newb]

Great thread!

I agree
Am I to understand that with BMO 2.99% that you have to stay with them for the full 25 yr amortization..but with 5 yr terms ?
Not that changing banks is cheap to start with, I like having the choice.

[tjthemanto]

I agree
Am I to understand that with BMO 2.99% that you have to stay with them for the full 25 yr amortization..but with 5 yr terms ?
Not that changing banks is cheap to start with, I like having the choice.

No just for the 5 year term. ( not the whole 25 year amortization period )

After 5 year term is over you can go anywhere you want or refinance your mortgage etc with someone else .

[freefreefree]

Thanks for the info

[Shwa Girl]

Thanks for the article tjthemanto.

[zoolou]

I just used BMO's rate to do a blended rate with my credit union ...... So for the next 5 years i'll have peace of mind at 3.5% and shaving 5 years of my amortization

[newb]

No just for the 5 year term. ( not the whole 25 year amortization period )

After 5 year term is over you can go anywhere you want or refinance your mortgage etc with someone else .

Thanks.... and after re-reading the thread I dont know why I got that impression...

[Brynhilde]

I'm glad other banks are offering that rate.. we aren't really ready to make that big step yet and are actually thinking of buying land instead but I definitely would not want to change banks in order to get that rate and for the terms mentioned!!

[Minou]

Maybe a person could increase the payments 10% and have extra automatically transferred to a savings account to save to do a lump sum payment annually and again when the term is up?

[MortgageQueen]

Maybe a person could increase the payments 10% and have extra automatically transferred to a savings account to save to do a lump sum payment annually and again when the term is up?

Yes, you could do that. . . and many people "intend" to and have the best of intentions, but it's my experience that the people more likely to pay down principal faster are the ones that increase their payment amount and do it accelerated bi-weekly. THIS route can have significantly more impact on paying down principal. .then shaving a couple of points off the mortgage rate.
Even better, do all of the above AND the 2.99. (as long as you don't need to break the mortgage over 5 years)
PLEASE do not be tempted to get a "higher" mortgage because the payments are cheaper. Bad move.

[lucy16076]

I have a mortgage with "First national" which I pay prime less .6% , so now it's 2.4%. I can do a 20% lumpsum yearly & increase my payments as well. I pay weekly therefore driving my principle down quicker as opposed to only paying bi-weekly. I try each year to hit the 20% mark, but it is tough. This year might be close as a new car is also on the wishlist.
So, the stipulations on this "great rate" by BMO can be matched if you shop around. Use a broker to see if you can get yourself a good rate with better options.

[MortgageQueen]

I have a mortgage with "First national" which I pay prime less .6% , so now it's 2.4%. I can do a 20% lumpsum yearly & increase my payments as well. I pay weekly therefore driving my principle down quicker as opposed to only paying bi-weekly. I try each year to hit the 20% mark, but it is tough. This year might be close as a new car is also on the wishlist.
So, the stipulations on this "great rate" by BMO can be matched if you shop around. Use a broker to see if you can get yourself a good rate with better options.

It sounds like you have a variable rate mortgage and while that is certainly a great product, it is not the same product as the 2.99 fixed rate. Yours fluctuates with the prime rate. At the moment, the rate you are referring to is not available. . .(by that, I mean "prime minus-.6 ". Variable rate mortgages are still available of course) but hopefully that will change in coming months. . .

[matty's mom]

I have a mortgage with "First national" which I pay prime less .6% , so now it's 2.4%. I can do a 20% lumpsum yearly & increase my payments as well. I pay weekly therefore driving my principle down quicker as opposed to only paying bi-weekly. I try each year to hit the 20% mark, but it is tough. This year might be close as a new car is also on the wishlist.
So, the stipulations on this "great rate" by BMO can be matched if you shop around. Use a broker to see if you can get yourself a good rate with better options.

I have mine with them too, and I love it. Best advice I got was to get a broker, and she was/is great. I love the rate and the ability to double up a payment whenever I want- and pay a lump payment once a year.

There are options out there...

[MissDayle]

I have a variable rate, it's currently at 2.15% so I'm pretty happy with that. Even though I've only owned my house for 9 months, 50% of my payments are currently coming off the principle!