Bank of Montreal confirmed Tuesday that it will be lowering five-year mortgage rates from 2.99 percent to 2.79 percent. This was followed by an announcement from TD Canada Trust, which stated that the bank will match BMO’s rate effective Wednesday.
These mark the lowest five-year mortgage rates on record for any of the “Big Five” Canadian financial institutions, according to data from Canadian real estate portal Rate Supermarket. The site’s Penelope Graham added that the rate decreases are a “big deal,” though not surprising in their timing, as BMO typically makes the first move to reduce rates in the run-up to spring home buying.
“This is the time of year when lenders get competitive about pricing,” Graham added. “Speaking from precedent, what we’ve seen in the past is that the others don’t immediately rush to match. But there’s nothing to say they won’t this year.” Still, the rates now being offered by BMO and TD Bank are not the lowest ones out there for five-year fixed mortgage products, as there are several “alternative” lenders that have long been pricing their products at 2.79 percent or lower. For example, Dominion Lending Centres and True North Mortgages offer the lowest five-year rates in Ontario at 2.59 percent.
With spring home buying set to kick off in earnest in the coming weeks, the rate decreases have been very timely indeed, and very much welcome considering the fact that home prices in Canada, just like in the United States, continue to appreciate. Separate statistics from the Canadian Real Estate Association tell us that the average home price in Canada increased over 6 percent to over $430,000 in February.
Even then, a 6 percent uptick in home prices is better than the double digit appreciation that was common in North America for most of 2014, and it would stand to reason that many consumers should find BMO and TD’s rate decreases a very welcome development as the run-up to spring home buying keeps pushing forward.