BMO (Bank of Montreal) has introduced a new 3.75% 5 year fixed mortgage with a maximum amortization period of 25 years. The current maximum amortization period is up to 35 years. Here are the details on this mortgage special:

Allows customers to repay their mortgage faster with a maximum 25-
year or less amortization

Saves homeowners over $67,000 in interest costs compared to leading
competitors’ five-year special fixed rate at 4.09% and 35-
year amortization (based on a $200,000 mortgage)

BMO is still showing their posted 5 year rate at 5.39% on their website, while the 5 year fixed rate in their “special rates” section is stil 4.09%.

This is a major move by one of the big banks and comes as BMO reported a $657M first quarter profit this week and is focusing on growing its mortgage market share after a couple years of losing ground after deciding to stop selling their products through mortgage brokers in early 2007. BMO’s market share fell to 9.2% in the last quarter, down 0.7% from the same time last year.

BMO also released details of a new poll that showed:

Nearly 70% of current home owners are looking to pay down their mortgage sooner

69% of current home owners would consider a shorter
amortization period if it helped reduce the overall cost during the
life of their mortgage

74% of Canadians looking to purchase their first home are
considering an amortization of 25 years or less

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