BMO Financial Group
TSX : BMO
NYSE : BMO

BMO Financial Group

April 20, 2012 09:00 ET

BMO Financial Tip of the Week: Pay Down Debt Ahead of Potential Interest Rate Hikes

TORONTO, ONTARIO--(Marketwire - April 20, 2012) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense' for Canadians, BMO is releasing a financial tip every week in 2012.

BMO's Financial Tip of the Week: Make paying down debt a priority ahead of interest rate increases (Read the story on debt reduction by The Globe and Mail's Rob Carrick here)

Following clear signals from the Bank of Canada that it may not leave its overnight rate at 1.0 per cent for very much longer, BMO Economics has brought forward its prediction for the first rate hike to January 2013 instead of the third quarter of next year.

With rates set to rise, one way for Canadians to reduce their household debt is by choosing a 25-year amortization.

"For two years now, BMO has been encouraging homeowners to take on a mortgage amortization of 25 years or less. Shortening the amount of time you carry mortgage debt should be a priority for any homeowner, as it saves thousands of dollars in interest rates over the life of the mortgage and ensures Canadians can begin building equity in their home sooner," said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal.

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.

For more tips on how to reduce debt and save, please visit www.bmo.com/smartsteps.

Contact Information