BMO Financial Group
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BMO Financial Group
BMO Bank of Montreal

BMO Bank of Montreal

March 07, 2012 17:30 ET

BMO: Become Mortgage-Free Faster and Retire Debt-Free

- Introduces new 10-year fixed low-rate mortgage with 25 year amortization at 3.99 per cent

- Lowers rate on 5-year low-rate mortgage with 25 year amortization to 2.99 per cent

TORONTO, ONTARIO--(Marketwire - March 7, 2012) -

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

BMO Bank of Montreal today announced it is making it easier for Canadians to become mortgage-free faster with the introduction of the new BMO 10-year fixed low-rate mortgage. The new product is modelled after the award-winning BMO 5-year fixed low-rate mortgage; it comes with a maximum 25 year amortization and an introductory fixed rate of 3.99 per cent. With today's announcement, BMO is also lowering the rate on its 5-year fixed low-rate mortgage by 50 basis points to 2.99 per cent, effective tomorrow. Both rates are available until March 28, 2012.

"For two years now, BMO has been actively encouraging Canadians to choose 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. Our new 10-year mortgage delivers on all counts," said Frank Techar, President and Chief Executive Officer, Personal and Commercial Banking Canada, BMO Financial Group. "This product caters to those planning to live in their own homes and rewards customers for borrowing smartly."

"At BMO, we believe the housing market is poised for a soft landing. Canadians can help ensure this outcome by choosing a shorter amortization and not over extending themselves, which we believe will have a moderating influence on housing prices," Mr. Techar added.

According to BMO Economics, interest rates are expected to begin rising in the second half of next year.

On a $400,000 mortgage at a 5 per cent interest rate, moving from a 30 year to a 25 year amortization can save upwards of $70,000 in interest, which Canadians can put directly towards their retirement.

Tina Di Vito, Head, BMO Retirement Institute, said: "Too many boomers are carrying too much debt into retirement, and servicing that debt can be difficult in your retirement years when income levels begin to decrease."

The new BMO 10-year fixed low-rate mortgage will be available beginning March 11, 2012.

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 $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

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