BMO’s decision to drop its five-year mortgage rate to 2.99 per cent generated a lot of buzz within the industry, but it likely won’t impact the housing market greatly, reports CBC News.

“I’m not sure it’s going to be a huge driver of a massive spring selling season,” Ben Rabidoux, president of the market research firm North Cove Advisors, said in an interview.

“I think it’s probably very likely that after this promotion ends that they reset their rates back to 3.5 per cent, and it's probably not going to be matched by the other big banks.”

Originally at 3.49 per cent, the reduced five-year mortgage rate is being offered until April 17. The bank says that decision to drop the rate is partially a reaction to falling bond yields, which generally help the banks determine how they should set their rates.

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