Looking for a mortgage? There are many to choose from in Canada, but there’s a certain security in choosing a mortgage from one of the biggest banks. That’s why I’ve put together this review of BMO Mortgages.
BMO offers a large selection of mortgages, including fixed and variable mortgages.
Below, I’ve listed everything you need to know, including the types of mortgages offered, how to apply, and the pros and cons to help you out as you search for the best mortgage for your purposes.
Key Takeaways
- BMO provides several mortgages, including fixed-rate and variable-rate mortgages.
- You can also apply for a mortgage and line of credit together.
- Applying for pre-approval is relatively simple, and decisions are made in 1-2 days.
About BMO Mortgage
BMO is one of Canada’s largest banks. It has a long history going back to 1817 when it was first established as the Bank of Montreal, and it offers a comprehensive range of banking products for individuals and businesses.
It also provides several mortgages to choose from. Whether you are a first-time homebuyer, want to buy a second property, or plan to refinance your mortgage, there’s something here for everyone.
Whatever you need, there are Mortgage Specialists available to help you through the process.
BMO Mortgage Rate
The interest rate is one of the first things I always consider when choosing a mortgage. BMO mortgage rates change constantly, but you want to find the best rate you can.
BMO offers three options to choose from:
BMO Fixed-Rate Mortgage
BMO’s fixed mortgage rates are popular because you can lock in a rate for the length of your term.
One of the things I like about BMO is that you can lock in the rate for 130 days after getting pre-approved. This gives me peace of mind because I know I can search for a property without worrying about rate increases.
BMO provides both open and closed fixed-rate mortgages. But even with a closed mortgage, you may be able to take advantage of accelerated payment options to pay off your mortgage faster.
There are several closed fixed-rate mortgages, with terms from one year to seven years. There’s also a 10-year mortgage.
You can choose from a 6-month or 1-year mortgage for open fixed-rate mortgages. The rates for these are higher than for closed rates.
There is also a convertible fixed-rate mortgage, but there is just one option with a six-month term.
You can see all the current rates here. Remember, these rates change all the time. You should also check out the limited-time offers because you may be able to find an even better deal.
BMO Variable-Rate Mortgage
The benefit of variable-rate mortgages is that you can pay off your mortgage faster if the prime rate falls. You can also change to a fixed rate if you want to.
You can find the current variable-rate mortgage rates on their website. There are two options: a 3-year open mortgage or a 5-year closed.
BMO Mortgage + Line Of Credit
This is the third option BMO provides, and it is called the Homeowner ReadiLine®.
With this, you get a mortgage and a line of credit together. A line of credit allows you to access credit as and when you need it, and you only pay interest on what you borrow.
You choose how much you want to allocate to your mortgage and line of credit. You can then borrow up to 80% of the value of your home.
With this, as you pay down your mortgage, you can increase your line of credit as you access the equity in your home.
This may be a good option if you want to spend money on renovations, make a large purchase, or for anything else you have in mind.
You can choose from a fixed-rate or variable-rate mortgage. Your home secures your line of credit, which can mean you get access to credit at a lower rate than unsecured loans.
BMO Mortgage Features
One thing that makes BMO stand out is its 130-day mortgage rate guarantee. This is the longest provided by any Canadian major bank, and it comes into play once you are pre-approved.
When you get a rate, BMO will hold it for you, giving you peace of mind. It also helps when you search for a property, and you can use it to compare mortgages from other banks.
BMO also provides accelerated payment options to pay off your mortgage faster, even if you have a closed mortgage.
How much you can pay depends on your mortgage. You may be able to increase your mortgage payment each year by up to 20%. You may also be able to make a lump-sum payment each year with no penalties.
BMO has several special rates to choose from. I won’t list them here because the offers change constantly, but it’s worth looking at them when you begin your search.
If you want to use a BMO mortgage calculator, there are several tools you can use. These include the Mortgage Affordability Calculator, Mortgage Payment Calculator, and Cash Flow Calculator.
Advantages of BMO Mortgage
- There are several mortgages, including a wide range of fixed-rate mortgages with terms of up to 10 years.
- The 130-day mortgage rate guarantee is the longest any major Canadian bank provides.
- Pre-approval is a quick process that only takes one or two days.
- BMO Mortgage Specialists are available to help and can even visit you.
- There is also the option to get a line of credit with your mortgage.
Downsides of BMO Mortgage
- You may be able to find lower rates at a digital bank rather than a large bank like BMO.
- The advice you get from a Mortgage Specialist is limited to BMO mortgages, compared with a mortgage broker who can advise about more options.
How to Apply for BMO Mortgage
Getting a mortgage pre-approval is free, and the process is straightforward.
To start, visit the BMO mortgage page. You will need to provide personal information so the bank can determine how much you can borrow and provide an interest rate. This includes:
- A Canadian ID like a passport or driver’s license.
- Details about your employment, like a recent pay stub, a letter from your employer, or a T1 for the previous two years for the self-employed.
- Your liabilities, including loans, credit cards, and other debts.
- Your assets, including your investments, real estate, and bank accounts.
You can then apply online or at your local branch. You could even ask a Mortgage Specialist to visit you.
It should only take a day or two to get pre-approved, and you can then lock in your rate for up to 130 days. So even if rates rise, you will have a good idea about the mortgage you can get.
BMO mentions that you may get pre-approved even if you are new to Canada, but you’ll have to talk to them first to find out about your options.
Your credit score will also play a major role in any decision, and BMO will carry out a hard credit check when you apply for pre-approval.
Once you have found a property, you can apply for a full mortgage. This will involve providing a deposit and providing additional documentation.
Even if you have been pre-approved, this does not always guarantee that you will be approved for a mortgage.
Mortgage Pre-Qualification
If you prefer, you can get a pre-qualification first. This does not involve a hard credit check, and it is more of a general guideline you can use to find out how much you could qualify for when you get pre-approved.
It is a faster process, and BMO still allows you to lock in a rate for 130 days.
You must be a Canadian resident to apply for pre-qualification, and you must be the age of majority in your province or territory. You must also be applying for a mortgage for a home you will live in and have been employed for the last two years.
Is BMO Mortgage Safe and Legit?
Getting a mortgage is a big decision, and you want to get it right. It can also be a stressful time. But if you choose BMO for your mortgage, you won’t have to worry about whether it is a safe option.
That’s because BMO is one of the largest banks in Canada. As such, you can be sure that its mortgages are safe and legit, as are all of its banking products.
Featured Mortgage Offer
Neo Mortgage
On Neo Financial’s website
- Compare mortgage rates across several lenders
- Access to competitive rates and online applications.
- Available Canada-wide
- Accepts a wide range of credit scores
FAQs
BMO claims that pre-approval takes as little as one or two days.
You can check your mortgage balance by signing into your BMO account online.
BMO does not currently provide mortgages with 30-year terms, and the longest available is 10 years.
Ensure you have all the information to hand to avoid delays with your mortgage approval, including your ID and details about your income and assets.
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