A few points with this mortgage offer make it seemingly better suited as a bait and switch tool than a viable product for the average buyer;
-Balloon payments only 10% rather than 20% typical or unlimited in many variable products.
-Payment increases only 10% per year
-No homeline/line of credit available or attachable
-Refinance only through BMO
-Fully closed
-Only owner occupied
-Rate hold only 90 days
-Expires January 25th
The average buyer will save only a few hundred dollars per year with this product, if they get caught out by any of the restrictions the liability may be much greater.
I think it was an exceptional marketing tool, has all of us talking about BMO. Great rate if you are not going to sell, pay off early, refinance, attempt to accelerate the mortgage or step out of the box in any other manner.
I’m not a mortgage broker, but if my variable was coming due, I would definitely be locking into the low 5 year fixed rates.
Having said that, you have to know the disadvantages that come with these low rates. For example, BMO is offering 2.99% but only if you choose a 25 year ammortization and your lump sum payments are capped at 10%.
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Rick DeClute
Realtor
Jan 16, 2012
A few points with this mortgage offer make it seemingly better suited as a bait and switch tool than a viable product for the average buyer;
-Balloon payments only 10% rather than 20% typical or unlimited in many variable products.
-Payment increases only 10% per year
-No homeline/line of credit available or attachable
-Refinance only through BMO
-Fully closed
-Only owner occupied
-Rate hold only 90 days
-Expires January 25th
The average buyer will save only a few hundred dollars per year with this product, if they get caught out by any of the restrictions the liability may be much greater.
I think it was an exceptional marketing tool, has all of us talking about BMO. Great rate if you are not going to sell, pay off early, refinance, attempt to accelerate the mortgage or step out of the box in any other manner.
Admin
Guest
Feb 02, 2012
Looks like TD also reduced its four-year fixed-rate mortgage to 2.99 percent. Available only on new mortgage applications made up until Feb. 29
Geoffrey Grace
Realtor
Jan 15, 2012
I’m not a mortgage broker, but if my variable was coming due, I would definitely be locking into the low 5 year fixed rates.
Having said that, you have to know the disadvantages that come with these low rates. For example, BMO is offering 2.99% but only if you choose a 25 year ammortization and your lump sum payments are capped at 10%.