BMO is one of Canada’s largest banks and they are back in the mortgage rate action

After taking a break last week from the intense competition in the Canadian mortgage market, BMO has returned with a suite of new low-rate fixed-term mortgage options for both insured and uninsured mortgages, all designed to grab more market share.

BMO's offerings include two fixed-term rates with 5-year terms priced at 2.49 percent for insured mortgages and 2.89 percent for uninsured mortgages. The bank has also created a 10-year fixed-term rate of 3.35 percent for both insured and uninsured mortgages. All of these rates come with the added incentive of a 25-basis-point reduction if borrowers set up automatic payments from their BMO account.

The move by BMO comes amidst a period of intense rate competition in the Canadian mortgage market. Many of the major banks have been offering aggressively-priced mortgage rates in an attempt to gain more market share. Additionally, there has been increasing pressure from the government on the banks to offer more equitable and competitive mortgage terms to Canadians. In light of this, BMO’s decision to step back into the mortgage market with competitive prices may be seen as a way of trying to regain some ground in the market.

The competitive landscape in the Canadian mortgage market has made it increasingly difficult for banks to differentiate themselves, with many offering similar rates. However, BMO’s move to reintroduce itself to the market with a selection of low-rate options offers potential customers the chance to take advantage of BMO’s expertise and customer service in addition to their attractive rates. This could help BMO stand out from its competitors and attract customers who are looking for a more personalised experience.

Overall, BMO’s return to the mortgage rate action is a sign that the bank is determined to compete in the increasingly crowded Canadian mortgage market. With its competitive rates and additional incentive of a 25-basis-point reduction for setting up automatic payments, BMO will likely be able to make headway and gain more market share in the months ahead. While BMO may not be the only bank offering competitive rates in the market, its focus on customer experience in addition to price could give it the edge it needs to remain competitive in the market.

This article was contributed on Aug 21, 2023