As Canada’s oldest bank, BMO offers a comprehensive range of mortgage products—from traditional fixed and variable-rate mortgages to specialized solutions for newcomers and cross-border properties.

BMO distinguishes itself with a 130-day rate hold, 20% prepayment privileges, and flexible repayment options that allow borrowers to skip up to four monthly payments while caring for family members. 

The bank’s mortgage services are available through an extensive network of branches, dedicated mortgage specialists, and now third-party brokers through its new BrokerEdge program. While Global Finance magazine named BMO one of the world’s safest banks, it maintains a 1.3 Trustpilot rating, with over 1,000 reviews. That said, BMO shines for convenient banking, and this article will cover its mortgage program in depth. 

BMO mortgage rates

BMO prime rate

BMO’s prime rate currently stands at 4.95%, following a decrease from 5.45% effective March 12, 2025. This rate, impacting lending and investment products, adjusts in response to the Bank of Canada’s overnight rate decisions, which occur eight times annually. 

Beyond the bank’s prime rate, BMO’s mortgage rates are influenced by borrower-specific factors, including credit score, loan-to-value ratio, and debt service ratios. Term length significantly impacts rates, with shorter terms typically offering lower rates than longer terms, while open mortgages command higher rates than closed options due to their flexibility. 

Borrowers can negotiate a better mortgage rate, plus BMO’s 130-day rate guarantee period protects you while shopping around. Otherwise, the bank has special mortgage offers, plus potential preferred rates for existing customers who maintain multiple BMO products. 

BMO overview 

Established before Canada’s independence in 1817, BMO is the country’s oldest incorporated bank and the fourth-largest by assets. Initially founded as Montreal Bank, BMO served as Canada’s central bank until the creation of the Bank of Canada in 1935. The bank has consistently expanded its services through strategic acquisitions and organic growth, including significant expansion into the U.S. market. 

BMO maintains a strong position in the Canadian mortgage market, with a residential mortgage portfolio of $155.8 billion and a HELOC portfolio of $49.5 billion. The bank’s mortgage portfolio is predominantly uninsured at 73%, with an average loan-to-value ratio of 51% on uninsured mortgages, indicating a conservative lending approach. 

With over 200 years of banking experience, BMO has grown to manage $1.29 trillion in assets and serves more than 13 million clients globally through its network of over 55,000 employees.

BMO BrokerEdge launch

BMO returned to the mortgage broker channel with BrokerEdge in January 2024, launching first in Ontario and Atlantic Canada. The program began with a controlled rollout, partnering with select brokers from DLCG (Dominion Lending Centres Mortgage Group) and M3 Group—expanding to include TMG The Mortgage Group In March 2024. 

The launch distributes BMO mortgages through third-party brokers and addresses evolving market demands—over 40% of Canadians now use mortgage brokers for home financing. The bank has brought on just over 100 brokers in its initial phase, focusing on quality partnerships rather than volume. BMO plans to continue its nationwide expansion, with the West Coast rollout as the next phase, aiming for complete national coverage by fiscal 2026.

Advantages

• Industry-leading 130-day rate hold guarantee protects against rate increases while house hunting.
• Generous prepayment privileges allow up to 20% annual lump-sum payments.
• Flexible payment features include skipping up to four monthly payments to care for a family or a newborn. 
• Comprehensive solutions, including specialized programs for newcomers, cross-border properties, and pre-construction homes.

Drawbacks

• Rates are higher than other available options. 
• Mixed customer service experiences with complaints about staff knowledge and resolution of payment issues.
• The new BrokerEdge program is only available in select regions, with nationwide coverage not expected until fiscal 2026.

BMO mortgage products and services

Core mortgage products:

BMO fixed-rate mortgages

BMO’s fixed-rate mortgages offer terms ranging from six months to ten years with an industry-leading 130-day rate guarantee period. The program features predictable payment structures and up to 20% prepayment privileges annually. Borrowers can choose between open or closed variants. 

As per 50 Insureye reviews, customers rate BMO’s fixed-rate mortgages 3.6 out of five stars. On the negative side, complaints frequently highlight insufficient staff knowledge and frequent mistakes—but it seems this varies across experiences. On the positive side, customers appreciate competitive rates and friendly service. 

BMO variable-rate mortgages

BMO’s variable-rate mortgages maintain fixed payment amounts despite rate fluctuations. The rates are tied to BMO’s prime rate and set at a certain amount above or below, like prime -0.55%. When prime rates decrease, more of each payment goes toward the principal; when rates increase, more goes toward interest. Borrowers can choose between open or closed variants. 

Ten Insureye reviews show customers rating BMO’s variable-rate mortgages 3.5 out of five stars. The one-star reviews primarily complain of a penalty for switching providers. Conversely, the four—and five-star reviews praise professional, quick, and easy service with competitive rates. 

BMO mortgage refinance

BMO’s mortgage refinancing program enables homeowners to make substantial changes to their existing mortgage, such as modifying rates, term lengths, and amortization periods. The program allows access to up to 80% of your home’s value, with options to consolidate debt, fund renovations, or pursue investment opportunities. 

While refinancing offers flexibility, it’s important to note that changes before your term ends may incur prepayment charges. It’s best to time your refinance with your renewal date to avoid these penalties. The bank provides dedicated mortgage specialists who can guide you through the qualification process, explain potential costs, and help determine if extending your amortization period makes sense for your financial situation. 

Special mortgage products:

Homeowner ReadiLine

BMO’s Homeowner ReadiLine combines a traditional mortgage with a secured line of credit, allowing homeowners to access up to 80% of their home’s value. As the mortgage portion is paid down, up to 65% of the home’s equity automatically becomes available as a revolving line of credit. Funds can be accessed through multiple channels, including online banking, BMO debit cards, telephone banking, branch visits, and pre-authorized transactions. Borrowers can also allocate borrowing between the mortgage portion and the HELOC portion. 

BMO Smart Fixed Rate

The Smart Fixed Rate Mortgage provides a competitive alternative to traditional fixed-rate terms. This specialized product typically offers lower rates than standard fixed mortgages in exchange for more restrictive repayment terms. While BMO’s standard closed fixed-rate mortgage offers 20% pre-payment abilities, the Smart Fixed Rate Mortgage is constrained to 10%—matching RBC’s prepayment restrictions. The product is available in 5-year and 10-year terms and is a good option for those without desiring the ability to make enhanced mortgage prepayments. 

U.S. Cross-Border Mortgage

The BMO Gateway Program provides specialized mortgage solutions for Canadians purchasing property in the United States. This program offers fixed and adjustable-rate mortgages and accepts applications from self-employed individuals. A unique feature is the ability to use Canadian credit history for U.S. mortgage applications. The program includes financing for condos and suggests in-person closing at U.S. title companies.

BMO Newcomer Mortgage

BMO provides specialized mortgage solutions for newcomers to Canada, specifically designed for permanent residents who have arrived within the last five years or holders of valid work permits. Newcomers can qualify for a mortgage even with limited or no Canadian credit history. The program includes personalized support with mortgage experts available to provide guidance in multiple languages, ensuring newcomers can navigate the homebuying process effectively.

Pre-construction mortgage program

The builder program offers a three-year rate guarantee during construction, and a 130-day rate hold guarantee for short closings. Features include no application or administration fees, full financing options for upgrades and assignment sales, plus flexible payment options. First-time homebuyers can access extended 30-year amortization periods for newly built homes. The program provides end-to-end guidance from pre-approval to closing, with firm mortgage approvals and flexible appraisal options.

Additional mortgage features:

• Family Care Option: You can skip up to four monthly payments while caring for a family member or newborn child. 
• Take a Break Option: This option allows you to skip up to one month of mortgage payments per year, with skipped amounts accruing interest.
• Prepayment Privileges: This program permits annual lump-sum payments of up to 20% of the original mortgage amount without penalty, plus the option to increase regular payments by up to 20% each year.
• 130-Day Rate Protection: This policy guarantees your quoted mortgage rate for up to 130 days while you shop for a home, protecting you from rate increases during this period.
• Portability: You can transfer your existing mortgage terms and conditions to a new property when you move, helping you avoid potential prepayment charges.
• Mortgage Assumption: The option to transfer your existing mortgage to a qualified buyer when selling your home.
• Convertible Fixed-Rate Mortgage: Enables penalty-free conversion from a six-month fixed-rate mortgage to another fixed-rate term exceeding one year. 
• Mortgage Protection Insurance: Optional mortgage insurance that helps protect your family by paying off or reducing your mortgage balance in case of death, critical illness, or disability.
• BMO Mortgage Offers: Special promotional offers, frequently including cash back options or rate discounts for eligible customers who usually must maintain other BMO banking products.

Factors Influencing BMO’s Mortgage Rate

BMO’s mortgage rates are primarily influenced by two key macroeconomic factors: the Bank of Canada’s overnight policy rate and government bond yields. The policy rate directly affects BMO’s prime rate, which is the foundation for the bank’s mortgage rates. However, economic conditions, market stability, and housing trends all impact rate determinations.

Individual borrower characteristics significantly impact BMO’s final rate. When determining personalized rates, the bank evaluates credit scores, income stability, and debt service ratios. Property factors influence rate calculations, including type, location, and intended use. The size of the down payment and whether the mortgage requires default insurance are additional factors that affect the final rate determination. The bank also considers term length in its rate structure, with shorter terms typically pricing differently than longer-term mortgages.

Getting the best mortgage rate with BMO

Securing the best mortgage rate at BMO requires a strategic approach focused on maintaining a credit score above 680 and aiming for a down payment of 20% or higher to avoid additional mortgage insurance fees. BMO’s mortgage specialists have the flexibility to offer better rates through their “pricing exception” system, particularly for clients who bring additional banking business or demonstrate strong debt-to-income ratios. 

The bank’s 130-day rate hold period provides ample time to negotiate, and borrowers should leverage BMO’s special rate promotions while comparing offers from competitors. Smart negotiation involves requesting the “lowest floor rate” upfront and using BMO’s posted versus special rates structure to your advantage, as the bank typically leaves room for rate discussions.

BMO mortgage application process

Eligibility criteria

As of January 2023, Canadian lenders like BMO can only provide mortgages to Canadian Citizens, Permanent Residents, or Indians as defined under the Indian Act.

Income and debt service ratio

BMO evaluates mortgage applications using standard debt service ratios. The GDS ratio, which encompasses housing-specific costs, is typically capped at 39% of your gross income. Meanwhile, the TDS ratio, which extends to all debts and housing-specific costs, must generally remain below 44% of your gross monthly income. 

Employment requirements usually include a minimum two-year history of stable income, with self-employed applicants needing additional documentation like business financials and tax returns.

Credit score

BMO requires a minimum credit score of 600 to receive a Smart Fixed Mortgage. However, the bank doesn’t disclose whether this credit score threshold applies to all mortgage products. Higher scores typically qualify for better rates and more flexible terms, with scores above 680 ideal.  

Down payment

BMO follows the standard Canadian down payment structure, which was recently improved in September 2024. Borrowers must have a minimum 5% down payment for home values under $500,000, which increases to 10% on home values between $500,000 and $1.5 million. That means the minimum down payment will be a blended range between 5% to 20%, depending on your home’s value. 

Homes valued over $1.5 million require a 20% minimum down payment. However, mortgage default insurance is required for down payments under 20%, with additional premiums ranging from 2.8% to 4% of the purchase price, depending on the down payment size.

BMO mortgage pre-approval

BMO’s pre-approval process offers a decision within two days. The bank provides an industry-leading 130-day rate hold guarantee, giving house hunters four months to find their ideal property while protecting them against rate increases. Preapproval requires a credit check, so the bank also offers pre-qualification—a basic estimate without any obligations. BMO’s mortgage affordability calculator also serves as a great starting point. 

Starting in early 2024, BMO’s new BrokerEdge program offers an additional pathway for pre-approvals through licensed mortgage brokers. This expansion allows homebuyers to choose between working directly with BMO mortgage specialists or accessing BMO’s mortgage solutions through their preferred mortgage broker. Both channels offer a streamlined process.

BMO mortgage application checklist

When applying for a BMO mortgage, you must verify documents during underwriting to receive the mortgage distribution. As per the bank’s home financing checklist, ensure to have the following types of documents, with the specifics displayed in the image below: 

• Employment and income verification
• Down payment confirmation 

BMO mortgage prepayment penalties

BMO’s prepayment penalties vary between mortgage types. Open mortgages allow full prepayment at any time without penalties, while closed mortgages follow a structured penalty system. For variable-rate closed mortgages, BMO charges three months’ interest as a penalty. Otherwise, BMO charges more than three months’ interest or the Interest Rate Differential (IRD) for fixed-rate closed mortgages. 

The IRD calculation is notably more complex, as BMO uses the difference between the original posted rate and the current posted rate for the remaining term, which can result in substantially higher penalties.

To offset these potential charges, BMO offers prepayment privileges that allow borrowers to make annual lump-sum payments of up to 20% of the original mortgage amount for standard closed mortgages or 10% for smart fixed closed mortgages without incurring penalties.

BMO mortgage renewal

It’s time to renew your mortgage when your term ends. This allows you to re-negotiate rates, refinance, or make material changes without mortgage pre-payment penalties. Like other banks, you can renew your mortgage close to the end of its term without penalties. 

To maintain a BMO mortgage, the bank’s renewal process can be completed online through BMO’s mobile banking app or in person with a mortgage specialist. However, it’s always best to shop around and negotiate rates three to four months before your renewal date. 

BMO alternatives and competitors

RBC

Royal Bank of Canada (RBC) offers a more extensive range of specialized mortgage products than BMO, including unique offerings like a 95% LTV vacation home mortgage. While BMO’s prepayment privileges are more generous, at 20% annual lump-sum payments compared to RBC’s 10%, RBC maintains a stronger presence with over 1,200 branch locations and provides distinctive features like a 25-year fixed-rate mortgage option.

TD

TD shines with flexible payment features. Their mortgages allow borrowers to increase regular payments by up to 100%, and the “Payment Vacation” offers up to a four-month break from mortgage payments. However, BMO outshines TD’s mortgage prepayment allowance—offering up to 20%, compared to TD’s 15%. Otherwise, both banks offer similar rates, qualification criteria, and newcomer programs, making the two banks comparable.

Scotiabank

Scotiabank competes with BMO through innovative mortgage solutions. Its Scotia Total Equity Plan (STEP) offers exceptional flexibility by automatically increasing your credit limit as your home equity increases. Their rate hold period falls ten days below BMO’s 130 days, but their mortgage products, terms, and rates remain similar. Both banks offer pre-payment privileges of up to 20% annually for closed mortgages. 

Takeaway

Overall, BMO combines traditional banking stability with modern lending innovations. Their comprehensive mortgage suite features industry-leading perks like a 130-day rate hold and generous 20% prepayment privileges. The recent launch of BrokerEdge expands its accessibility, while specialized products for newcomers and cross-border properties demonstrate its commitment to diverse borrower needs. 

Despite mixed customer reviews, BMO’s conservative lending approach and extensive financial resources make them a reliable choice for Canadian homebuyers seeking reasonably competitive rates and flexible mortgage solutions.

Frequently Asked Questions

Daniel Schoester

Last modified: March 20, 2025