BMO’s Door Crasher Variable Rate

BMO Mortgage Rate SaleBMO has come out swinging with its latest spring promo.

The country’s fourth largest bank is advertising a red-hot prime – 1.00% variable. At 2.45% currently, it’s now the best variable rate for refis in the country.

This special is also the largest widely advertised big-bank variable discount we’ve ever seen.

As of press time, we’re still getting details and will post them here when we do. For now, here’s what we know:

  • It applies to purchases, transfers and refinances
  • It’s not available to current BMO borrowers coming up for renewal (can you hear that hissing sound from BMO’s existing customers?)
  • The maximum amortization is 25 years
  • It is optionally available with BMO’s ReadiLine readvanceable mortgage (line of credit)
  • It’s a standard charge mortgage for cheap easy switching of lenders at maturity, unless you get it in a BMO ReadiLine (which is registered as a collateral charge)
  • BMO will guarantee this discount up to 130 days if you apply before the promo is over
  • The mortgage rate is compounded monthly — which, on a typical $200,000 mortgage, costs you about $118 more over five years than semi-annual compounding
  • BMO says the promo will expire at the “end of May”
  • BMO’s variable rate mortgage is not portable, which is a deal killer for some.

Finally a Big 6 Bank Shows Signs of Life

BMO’s move is a counter-attack on HSBC, which has dominated the uninsured variable-rate market for two months with its prime – 0.96% (2.49%) special. Prior to this, no Canadian bank has openly gone head to head with the multinational giant.

The move also marks a long and steady improvement in floating rates in general. Competitive variable rates were as poor as prime – 0.20% back in early 2012. Back then, some speculated that we may never see prime – 1.00% again. But variable discounts have been improving ever since.

Latest Canadian bank rates. Latest BMO mortgage rates.



  • This is not the same as prime -1% from several years ago. It’s more like prime -0.8, since they padded 20bps (2x10bps) over last few years. I’m referring to the BoC dropping prime by 25bps, while the banks dropped their prime by 15.

  • Mark says:

    That may be, but when was the last time you saw a major bank advertise even prime – .80%?

  • @Mark, last year TD advertised a 5yr variable for 1.99%.
    I do agree 2.45 is a great rate.

  • Mark says:

    Last year prime rate was 3/4 per cent lower.

  • And TD’s mortgage prime rate was 2.85 (vs 3.6 now).

  • Just got an offer from our BMO financial services manager to early renew at 2.5%, with 4yrs left. Current rate is prime minus 50 or 2.95% and it is a rental. The interest savings will significantly exceed the prepayment penalty.

  • Ogopogo says:

    Curious at what do people do when they are say 2 years out from completing a 5 yr variable P -.60?

    In my situation- the balance is less than $175kand the 3 month penalty eats into the further .40 discount.
    My credit union in BC offerIng no option to match. Give me 2.99 for fixed 2 yr. This will give .14 higher than 2.85% but will buffer 1 potential increase.

    Some brokers won’t give me the time because of the small balance.

  • Melanie says:

    Hi Ogopogo,

    A few questions for you:

    1) Is your mortgage presently insured?
    2) What is your home value?
    3) Do you want to switch to a new lender and keep the same balance and amortization?


    Mortgage Broker
    intelliMortgage Inc.
    FSCO# 12326

  • Ogopogo says:

    Hi Melanie,
    1) Not insured
    2) 1.7-1.9 mil gvr region
    3) same balance and amortization . Going to another lender is option only if it makes financial sense. Unsure if there is any other fees involved eg: lawyer, etc

    Thanks Melanie

  • And I forgot to mention, that early renewal offer is on a mortgage with a 30yr amortization.

  • Melanie says:

    Hi Ogopogo,

    Assuming you meet the other insurable qualifications, there’s a chance you’d qualify for as low as 2.35%, perhaps even lower.

    There should be no discharge or appraisal fee. But if your mortgage is a collateral charge (which is common for credit union mortgages) then there would be a ~$795 collateral charge transfer fee.

    The nominal cost difference between 2.85% and 2.35% is about $4,100 on a $175,000 loan amount — more than enough to cover a standard 3-month interest penalty plus closing costs.


    Mortgage Broker
    intelliMortgage Inc.
    FSCO# 12326

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