Brokers better BMO's best

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Nice try, BMO, but no cigar. Brokers say they aren’t the slightest least bit worried about the bank’s new 3.09 per cent five-year fixed because the channel can match and even better that no-frills offer.

“I don’t see it as a big issue,” said Vince Gaetano, broker for Monster Mortgage in Toronto. “We have at least three lenders who can match 3.09 per cent without the restrictions the come with the BMO loan.”

While the rate offered by BMO might seem attractive, the bank’s product does not offer consumers the flexibility that other lenders provide, Gaetano told

For instance, the bank offers a 10+10 prepayment option on the particular product, but brokers can find mortgages at a similar rate that come with 25+25 option, said Gaetano.

BMO’s recent offer comes at the heels of TD’s move last week to bump up its five-year fixed by 20 bps. This followed an earlier move by RBC which brought it five-year fixed up to 3.69 per cent.

BMO’s latest offer is an attempt to win back customers, according to another broker.

“They’re (BMO) just trying to regain market share that they lost when they excited the channel,” according to Michael Pezzack, broker at Meridian - Buyingblock, in Toronto. “Many borrowers might be attracted by the low rate, but ultimately they are better off going with the channel.”

Buyingblock currently offers 3.1 per cent on a five-year fixed, but can also get borrowers 2.99 per cent, said Pezzack.

“The main advantage of going with a broker is flexibility,” he said. “Borrowers get the mortgage the best suits their needs.”

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