If you’ve been shopping around for a mortgage lately, you might’ve noticed that some offers from the country’s biggest banks are looking especially attractive, the Globe and Mail reported today.

Canadians have been handed a golden opportunity to snag mortgage rates at rock-bottom prices, but highly competitive lending is pushing overly optimistic opportunities on people who might not understand what they’re getting themselves into, suggest some members of the mortgage industry.

“The banks are coming out to try and be lucrative enough to pull clients in,” said Jeff Mayer, an agent at Mortgage Intelligence, a Toronto-area mortgage broker. “That being said, I still think everyone should be taking a step back and looking at what direction they should go in.”

Direction is something that a lot of Canadians could probably use these days when it comes to lenders, especially considering the lack of certainty that has engulfed the mortgage industry as of late.

Hardly a year ago, it seemed like a black cloud was gathering over lenders, with fears it would be impossible for some to even consider applying for a mortgage and worries they’d be shown the door before they’d even filled out the application.

Those concerns were pushed aside in a matter of months, and many Canadians in good financial standing can now secure very attractive rates. The question is, how was this shift possible in a recovering, yet still uncertain economy.

“It’s a knee-jerk reaction — Canadians are known for it,” Mr. Mayer explained of the lenders. “You’re going to see rates climb in the next three to four months, guaranteed.”

All of this talk about the interest rates climbing makes it especially unusual to see some banks drumming up attention for surprisingly low mortgage rates.

On Friday, Bank of Montreal (BMO-T54.02-0.29-0.53%) launched a promotional push for its five-year closed variable mortgage at 2.25 per cent, which it calls the “lowest rate in more than 30 years.”

“We think lower mortgage rates have played a key role in providing more affordability for home buyers, which has helped turn Canada’s housing market around from weaker levels earlier this year,” said Frank Techar, president of the bank’s personal and commercial banking division.

“We are trying to support our customers coming off of what we consider to be a pretty difficult year, in general for everyone.”

So far, the other Canadian banks haven’t moved to match BMO’s closed variable rate, though they’re offering other low and competitive rates on other types of mortgages.

“A year ago they (the banks) couldn’t do it because we were going through this huge credit crunch, so they had to cut the reins,” said Clay Gillespie, vice-president and portfolio manager at Rogers Group Financial in Vancouver. “Turns out our Canadian banks weathered the storm quite nicely, and we have a real estate market that’s still pretty vibrant.”

The banks have received extra help from Bank of Canada governor Mark Carney, who issued a conditional commitment to keep the policy rate at the record low of 0.25 per cent until next summer. That means the best mortgage rates will hold near their record lows for at least a little longer.

Read the rest of the article here .

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4. Canada’s Big Banks Quickly Cut Prime Rates to 3%
5. Big Banks Drop Mortgage Rates

Tags: banks, mortgage rates