BMO the first o slash rates and go with 5.25% 5 year

There were preliminary indications Friday that residential mortgage rates could be drifting lower after Bank of Montreal announced a "special" offer of 5.25 per cent on its benchmark five-year, fixed-rate home loan.

BMO said the new rate takes effect today and would be available to "all new and existing" customers. Its current posted rate on that product is 7.2 per cent. A spokesperson said the new rate is not subject to an expiry date. Nonetheless, mortgage rates can generally change at any time.

It was unclear whether BMO's move marked the beginning of a larger trend. Traditionally, five-year, fixed-rate mortgages are the most popular loan option for homeowners.

BMO's announcement comes two days after Finance Minister Jim Flaherty tripled the size of the federal government's mortgage purchase program to $75 billion.

Stephen George

Stephen George

CENTURY 21 Action Power Team Ltd., Brokerage*
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