5-year fixed, 3-year fixed

Compare Bank of Montreal (BMO) Mortgage Rates in Canada

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Compare BMO Mortgage Rates in Canada

The Bank of Montreal, or BMO, is Canada’s oldest bank, and one of the largest banks in North America today. Offering a range of conventional residential mortgage products, BMO is considered one of the Big Five Canadian Banks, and along with other institutions like CIBC, Scotiabank, and nesto, is classed as an A-lender. In this article, we lay out BMO’s main mortgage solutions, rates, and flexibility options.

Key Highlights

  • BMO offers closed, open, and convertible mortgages
  • BMO offers up to 20% prepayment options on their mortgages
  • BMO has a fairly straightforward renewal process, however, it’s also possible to renew your mortgage with a new lender if you find a better rate elsewhere.

Compare Bank of Montreal (BMO) Mortgage Rates

Here’s a breakdown of mortgage rates from the Big Banks. In this table, you’ll see the current rate for different terms and types of mortgage, and how they each compare to different banks. When you’re comparing mortgage rates, generally it’s a good idea to compare rates from multiple lenders at once and look for the lowest possible rate, since you could save thousands over the lifetime of your loan with a bit of research in advance.

Top 5 Big
Bank Rates

The top 5 big bank rates all in one easy-to-view table. See their rates then beat their rates (or get $500) with nesto’s low rate guarantee.

*Toronto rates

How to Compare Bank Rates from Big Banks

When you’re comparing rates from banks like BMO, and the other Canadian Big Five banks, you’re generally talking about conventional lenders, who have some of the lowest rates available compared to private and other alternative lenders. (There are a range of different lender types in Canada). 

When you’re looking for the best rate, A-lenders like nesto and the Big Five update their rates regularly based on changes in the Bank of Canada’s key interest rate. Ultimately, you want to go for the lowest rate possible, since a lower interest rate could save you thousands over the lifetime of your mortgage. The best way to compare rates is to check out multiple lenders at once and see what’s available. You also want to make sure you find a mortgage solution that works for your situation, and here it helps to know the pros and cons of fixed versus variable rate mortgages, and other different types of mortgages in Canada. 

Finally, if you’ve found a rate from a lender other than nesto, we guarantee that we’ll match or beat it, or you could get $500. Learn more about nesto’s low rate guarantee.

BMO Overview & Stock Information

The Bank of Montreal was founded in 1817, and was Canada’s first bank. Today, the bank serves over 10 million individuals, institutions, and corporations worldwide, with its primary customer base located in North America. As one of the Big Five Banks, BMO is a popular choice for Canadian residential mortgages. Listed on the stock exchange as BMO, shares in the company have traded roughly between $125.00 and $150.00 Canadian for the last year, with share value trending gradually and steadily downwards since this time last year. The company’s CEO is currently Darryl White, who has been serving as the chief executive officer since November 2017. 

BMO 5-Year Fixed and Variable Rate History

BMO is one of the largest banks in Canada, and has consistently had competitive mortgage rates in both the fixed and variable rate categories. Historically, BMO’s 5-year fixed and variable rate mortgages have generally followed national trends related to rising and falling interest rates, as set by the Bank of Canada. BMO’s variable rate mortgages can be converted to a fixed rate at any time, although if you are converting your mortgage to a fixed rate you may not be able to get the best rate automatically.

We don’t track historical rates at BMO. 5-year mortgage rates are the most popular rates to choose from in Canada, with people switching between fixed or variable depending on market trends. Analyzing the chart from Bank of Canada below can help you choose between a fixed or variable 5-year mortgage rate in today’s market.

Bank of Canada Policy & Prime Rate Changes

Date of Rate ChangeKey Overnight Target Rate (%)Change (%)Bank Prime Rate
June 2, 20100.30%0.25%2.50%
July 21, 20100.55%0.25%2.75%
September 9, 20100.80%0.25%3.00%
January 28, 20150.65%-0.15%2.85%
July 16, 20150.50%-0.15%2.70%
July 13, 20170.75%0.25%2.95%
September 7, 20171.00%0.25%3.20%
January 18, 20181.25%0.25%3.45%
July 12, 20181.50%0.25%3.70%
October 25, 20181.75%0.25%3.95%
March 5, 20201.25%-0.50%3.45%
March 17, 20200.75%-0.50%2.95%
March 30, 20200.25%-0.50%2.45%
March 3, 20220.50%0.25%2.70%
April 14, 20221.00%0.50%3.20%
June 2, 20221.50%0.50%3.70%
July 14, 20222.50%1.00%4.70%
September 7, 20223.25%0.75%5.45%
October 26, 20223.75%0.50%5.95%
December 7, 20224.25%0.50%6.45%
January 25, 20234.50%0.25%6.70%
March 8, 20234.50%0.00%6.70%
April 12, 20234.50%0.00%6.70%
June 7, 20234.75%0.25%6.95%
July 12, 20235.00%0.25%7.20%
September 6, 20235.00%0.00%7.20%
Bank of Canada’s Benchmark Key Policy Target for the Overnight Rate increases. This is the benchmark or Policy rate that dictates all lending in the country. Source: Bank of Canada

The Bank of Canada (BoC) will deliberate on the Key Overnight Target rate twice every quarter. Generally, all lenders will follow suit to keep their prime rates in line with the country’s Big Six chartered banks. Find below the most recent changes to the baseline, which impacted the spreads to the Big Banks Prime Rates.

You can find more details about the Key Overnight Target Rate and an explainer from the Bank of Canada (BoC) if you want to learn more about this topic.

BMO Mortgage Products

BMO offer a range of mortgage solutions, from fixed, to variable and convertible mortgages. They have a fairly conventional offering of residential mortgages, with competitive rates and decent prepayment flexibility. Here’s a breakdown of BMO’s main residential mortgage products.

Fixed Rate Closed Mortgage

BMO offers fixed rate closed mortgages, which lock in your interest rates for the duration of your term, making your monthly payments the same regardless of fluctuations in interest rates. BMO offers 1 to 10 year terms, with Smart Fixed options available for 5 and 10 year terms. Rates vary depending on whether you get an amortization period of less, or more, than 25 years.

Open Fixed Rate Mortgage

Open fixed rate mortgages from BMO are useful if you plan to make prepayments of more than 20% of your original mortgage principal, or if you plan to sell your home in the near future. Interest rates with open fixed rate mortgages are generally higher to allow for this additional flexibility.

Variable Rate Mortgage

With a variable rate mortgage, while your payments remain the same, the amount applied to your principal can fluctuate with BMO’s prime lending rate. Variable rate mortgages historically perform better than fixed rate mortgages in terms of total repayments, however if interest rates fluctuate significantly your payments may increase by comparatively more. BMO offer 3-year open and 5-year closed variable rate mortgages.

Convertible Fixed Rate Mortgage

A convertible fixed rate mortgage offers similar benefits to a closed mortgage, but with the added flexibility of changing to a longer fixed rate term of 1 year or longer without a prepayment charge. Convertible mortgages are useful if you want to change your term shortly after buying your house, or if your financial situation evolves.

BMO Homeowner ReadiLine®

BMO Homeowner ReadiLine® is essentially mortgage and a line of credit in one. With this product, you can borrow up to 80% of your home’s value, with the option to split between a mortgage and a line of credit. As you pay off the mortgage, the principal you repay will increase the limit available on your line of credit. This option is a great choice if you’re looking to use your equity to make further improvements on your house, or to consolidate other debts at a lower interest rate by paying them off with your credit line.

BMO Mortgage Payment Increases

In mortgage terms, prepayment describes when a borrower pays off some or all of their mortgage early, with a lump sum payment, or by increasing their monthly payments. Each major bank has different amounts you can pay off each year on your mortgage. Some mortgages come with more attractive prepayment options, so it’s worth looking into if you want the flexibility of being able to pay back your mortgage early. BMO offer fairly generous prepayment terms, with up to 20% on many of their mortgage products. This means that you are able to increase your monthly repayments by up to 20% once each calendar year to help pay down your mortgage faster. BMO offers a range of mortgage payment increase options, including:

Accelerated payments

With BMO, you can increase your mortgage payment once per calendar year (depending on your type of mortgage) by up to 10%, with a BMO Smart Fixed Mortgage, or 20% for any other kind of BMO closed mortgage.

Alternatively, you can make lump-sum prepayments each year without a prepayment charge, up to 10% of the original mortgage amount for a BMO Smart Fixed Mortgage, or 20% of the original mortgage amount for any other BMO closed mortgage.

Increased payment frequency

BMO customers have the option to switch from monthly mortgage payments to an accelerated weekly or bi-weekly schedule, to help save money in the long run.

Increased payment and reduced amortization

You can choose to increase the amount of your regular mortgage payment (principal and interest) by up to 20% (10% with a BMO Smart Fixed Mortgage) without any additional charge. BMO customers can do this once in every calendar year. Paying more each month will shorten your amortization period and can reduce your interest costs over time.

BMO Annual Mortgage Prepayment

Here’s a breakdown of the Big Six banks and their prepayment amounts. As you can see, BMO offer one of the highest prepayment amounts of any of the other major banks, at 20%, however the setup of BMO’s prepayment amounts varies depending on the type and term of your mortgage. For example, a BMO Smart Fixed Mortgage has a 10% prepayment amount, rather than 20%.

Canadian Bank Closed Mortgage Prepayment Amounts
TD Bank15%
National Bank10%

Renewal Process with Big Banks

With BMO, if you’re renewing with the same lender the process involves getting in touch with the bank directly to explore your renewal options. However, the renewal process often brings up questions like whether or not you have to renew your mortgage with your current bank. The answer is no, you do have the choice to renew at the end of your term with any bank or mortgage provider. If you’re looking to renew your current BMO mortgage with another lender, it’s worth shopping around for better rates and terms that suit your situation before you renew with the same lender.

At nesto, we help you find the best rates available on your mortgage, and we also lend directly. Our simple renewal process guide explains in more detail how to renew your mortgage with a new lender. To get started and renew your mortgage with nesto, start by finding the best rate available near you, at least a couple months before your current term is due to expire. Once you’ve found a solution you’re interested in, simply get in touch and a mortgage advisor will help you through the process. Renewing with nesto is a simple, hassle-free process that could save you thousands over the lifetime of your mortgage compared to the Big Banks. 

Frequently Asked Questions

Here are some of the commonly asked questions about BMO’s mortgage offerings and rates recently. 

Are BMO rates lower than other big banks?

Historically, BMO’s rates have been more or less competitive with the other big Canadian banks. Currently, BMO’s fixed and variable rate mortgages are in line with the other Big Five lenders, with variations in posted interest rates measurable in tenths of a percentage. Currently, BMO’s 5-year fixed rate mortgage rate for a default insured mortgage starts at 5.17%, which is roughly the same as other banks.

What are the benefits of choosing a smaller lender?

Some smaller lenders like credit unions and other alternative lenders may be able to offer lower rates than the big banks like BMO. However, big banks and other A-lenders typically have more stringent lending criteria that allow them to offer lower rates than you can find elsewhere because they opt for less risky borrowers. Smaller lenders may be able to offer mortgages to people with unique employment situations or poor credit, but they may charge higher interest rates as a consequence.

How do I get a mortgage with BMO?

BMO suggests getting in touch with one of their mortgage advisors to talk about your loan. The bank offers quick online pre-qualification tools and you can start the process of applying for a mortgage with BMO online. At nesto, we can help you compare the best rates from BMO and other big banks to find the best rate possible, plus, we also lend directly.

Final Thoughts

BMO is one of Canada’s oldest and largest banks, and makes up one of the Big Five, or Big Six Canadian banking institutions. The bank offers a range of conventional mortgage products for residential customers, and offers rates that are in line with other big banks and A-lenders. BMO offer decent prepayment options for many of their mortgage products and some flexibility in the form of convertible mortgages and open mortgages. Ultimately, if you’re looking to find the best rate possible with the big banks, look at multiple lenders first to see who offers the lowest rate possible.

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