It came back with a twist. The BMO 5 year fixed 2.99% no frills mortgage rate came back on the weekend, but was only available to on-line customers. It initially caused quite a stir with the minister of finance because of concerns that it will lead to more consumer debt. BMO’s retort was that their no-frills mortgage limits the amortization to 25 years so borrowers must pay-off their mortgage faster. Great marketing that turned one of many restrictions into a positive. They obviously didn’t want to highlight the restriction that you couldn’t leave BMO for 5 years no matter what the circumstances.
BMO’s latest approach has been to fly under the radar and also to prevent borrowers from getting professional mortgage advice. They won’t be admitting to that anytime soon, but that’s the way it’s worked out. The 2.99% mortgage rate wasn’t advertised in the branches and it wasn’t even available through BMO’s own mobile mortgage specialists. The only way to get the 2.99% mortgage rate was through a targeted mailing or by applying on-line.
The benefit of professional mortgage advice from a branch or mortgage specialist isn’t a “frill” to be forgone for the sake of a lower mortgage rate. A mortgage transaction is arguably the biggest financial transaction for millions of Canadians. The subtle differences in mortgage terms and conditions could end up costing a borrower tens of thousands of dollars in penalties and additional mortgage interest due to pay-out restrictions. This is one gift horse you should definitely look in the mouth.