BMO Financial Group

BMO Financial Group

June 21, 2012 08:22 ET

BMO Bank of Montreal Strongly Supports Changes to Canada's Mortgage Market

- Aligned with BMO's two-year campaign to encourage Canadians to borrow smartly by choosing a mortgage with a shorter amortization

- Making Money Make Sense: Canadians will have saved over $179 million in interest by choosing a BMO mortgage with a 25-year amortization(1)

TORONTO, ONTARIO--(Marketwire - June 21, 2012) -

Editors' Note: There is a photo associated with this press release.

BMO Bank of Montreal today strongly endorsed changes to Canada's mortgage market.

"The changes announced by Minister Flaherty are prudent, measured, responsible, timely and aligned with BMO's ongoing efforts to encourage Canadians to choose a mortgage with a shorter amortization," said Frank Techar, President, Personal and Commercial Banking, BMO Bank of Montreal. "BMO believes the new measures will support the long-term stability of the Canadian housing market. Minister Flaherty has tapped the brakes at precisely the right time and his actions should help ensure Canada's housing market experiences a soft landing.

"For two years now, BMO has been guiding Canadians to borrow smartly by choosing a mortgage with a shorter amortization, which is allowing them to become mortgage-free faster, pay less in total interest, protect themselves against the possibility of rising interest rates and help secure a debt-free retirement.

"Customers who have selected the BMO five-year fixed rate mortgage with a maximum 25-year amortization so far in 2012 will have saved over $179 million(1) collectively by the time their mortgages have been paid off," concluded Mr. Techar.

(1)Savings calculation is an approximation and is based on the total number of BMO customers (new, refinance, renewals) who have taken a BMO 2.99%APR low rate fixed 5 year mortgage since January 1, 2012 until May 23, 2012. Savings are based on (i) total interest savings of these customers (determined as on the difference between 2.99%APR and the lowest published rate from a Canadian chartered bank for the same time period or the customer's prior rate in the case of a refinance or an early renewal multiplied by the mortgage amount and the 5 year term) plus (ii) amortization savings of these customers (determined as the total amount of BMO mortgages granted during this time period multiplied by the percentage of customers who took a 30 year amortization, divided by the average mortgage balance of these customers and all multiplied by the average interest savings per customer for the average duration of a 5-year term at 2.99%APR on this average mortgage balance amount). The savings calculation assumes that no prepayment charges were payable by customers for refinances or early renewals and that the difference in interest rate described in (i) rate remains the same in the last 5 years of a 30 year term. The Annual Percentage Rate (APR) for the low rate fixed 5 year mortgage was 2.99%. APR assumes no fee(s) apply. If we required an appraisal, the appraisal fee would increase the APR.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $525 billion as at April 30, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

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