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BMO offering:  5 year fixed at 2.99%

Let’s look at this offer a bit closer:

1.  Maximum amortization is 25 years.  If you are in a 30year amortization contract right now, the net effect would mean an increased mortgage payment of about $200 per  month on a mortgage of $300 000 (at 3.09%)

2. Fully-Closed Terms  – This will bar you from any sale or refinance options.

3.  Heavy penalties with non-discounted penalty calculations: The non-discounted penalty calculations would typically be 4% of mortgage balance or $12,000 on average (based on a $300,000 mortgage)

4.  Lower pre-payment privileges

5.  Lower options payment privileges

6. No Home Equity Lines of Credit will be available.

The bottom-line … This type of mortgage is very restrictive and can cost you more in the long run.

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