Please read the fine print of any offering and mortgage, there are often stipuations and restrictions.
See the short article below to learn more about what to look for with mortgage rates and locking in long term.
As you may have already heard, BMO announced yesterday that they are bringing back their 5 year fixed rate special of 2.99%. This will once again, spark rate wars! When they first announced this special in January, other banks and mortgage lenders were quick to respond with their own rates of 2.99%, however just on 4 year terms.
While the BMO rate sounds attractive, it comes with some serious restrictions:
- Fully closed for the full 5 year term. This means that you cannot pay the mortgage off in full unless the house is sold through to a non-family member for fair market value. This also means it can't be refinanced during the term, unless done through BMO (guess who has the negotiating power in that situation?)
- maximum 25 year amortization (their website says 'for people who want to become mortgage free in 25 years'. Clever marketing, but a little misleading as there are many borrowers who go with 30 year amortization and are committed to getting it paid off faster. Any lump sum payment will significantly accelerate the pay off of the mortgage. I digress)
- Prepayment privileges are limited to 10% / year.
There ARE better 5 year fixed products available out there for 2.99% with much better terms then BMO, such as full prepayment privileges of 15%, 30 year amortization, and a closed period of only the first 3 of the 5 years.
The 4 year fixed at 2.89% (something that has been available since August) is also becoming a popular option.
It is important to read the fine print on any mortgage, as many mortgage professionals may not take the time to explain them to you. While a rate may look the same on paper, certain restrictions can end up costing you more money down the road. Provided by Paul Meredith, Citycan financial
I hope this finds you Happy and Healthy!
All the Best!
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
FAX 905-828-2829 CELL 416-520-1577
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