As with any mortgage, it`s essential to understand the restrictions that come along with it. This is especially true with a discounted rate, as the customer is often presented with tradeoffs. If consumers are fully aware of theses tradeoffs and the impacts these can have on their personal situations, they will be empowered to make the best decisions.
BMO has recently started offering a 3.59% 5-Year Fixed Rate. Let`s start by examining some the tradeoffs as compared to their traditional 3.99% and the 3.59% 5 Year Fixed Rate being offered by True North Mortgage:
This presents an interesting tradeoff. For BMO customers you have access to a great rate and you can stay with you current financial institution. You are of course giving up flexibility, through prepayment priviledges, and the ability to break your mortgage. For some, the 25 year amortization cap alone may drive you to consider other alternatives.
I`m curious? Which way would you go?
See current BMO mortgage rates here.