Christine Buemann Mortgage Broker

The Bank of Canada’s Finance Minister Jim Flaherty was known for criticizing BMO’s 2.99% mortgage promotion. He even went as far as encouraging other banks not to follow suit. Now that he has stepped down, they have come out with their Spring special yet again. Although rates are always an important factor in a mortgage, it is important to look at all of the aspects and/or restrictions in a mortgage. This particular special has caught a lot of flack because of their restrictions but there are several other lenders and products on the market to be aware of as well. Here are a few of the restrictions on this particular BMO Special: ·          Pre-payment options are reduced to 10/10% ·          Amortization is capped at 25 years (most you can still go to 30 or 35 years with 20% down) ·          Full repayment before maturity can only occur if property is sold to an unrelated purchaser at fair market value or if the mortgage is renewed or refinanced into another BMO mortgage prod

The Bank of Canada decreased their Qualifying Rate to 4.99% which is great news for anyone looking for a term other than a 5-10 year fixed. You may wonder what the Qualifying Rate is or how it could affect your potential mortgage. As of April 19, 2010 all insured mortgages (less than 20% down) with a term of less than 5 years or a variable rate must be qualified at the current Qualifying Rate as opposed to the actual interest rate. Here is an example*: Purchase price       $300,000 Down payment     $  15,000 CMHC Premium   $ 7,837.50 Total Mortgage     $292,837.50 For this mortgage with a 5 year fixed rate term, you would need to earn just over $60,000 a year in income to qualify**. For this same mortgage at a variable rate or term less than 5 years, you would need to earn at least $70,000**. The Qualifying Rate was at 5.34% as a few weeks ago so this recent drop will definitely help those who will be subject to it.  With the same mortgage at that rate, you would