BMO Bank of Montreal has extended its guaranteed rate period for mortgages to 120 days, ahead of today’s interest rate decision.
Even if the BoC holds steady this month, the increase from 90 days is in expectation of further interest rate hikes this year; and means that the lender now has the longest guaranteed rate period among Canada’s major banks.
"This change in our mortgage rate guarantee period could not be timelier for our customers," said Martin Nel, Head, Personal and Small Business Banking, BMO Financial Group. "As always, we are listening and responding to their needs to help make their financial dreams a reality, while removing friction and uncertainty from the home buying process."
The bank’s senior economist Sal Guatieri added that the year has already hit homebuyers with tougher mortgage rules, a rising rate environment, and uncertainty in high-priced housing markets.
With monetary policy tightening, and interest rates pressured by the stronger US economy, he believes that the BoC will increase rates again this year and says the longer rate guarantee will help those in markets such as Toronto and Vancouver by giving more time to consider their purchase.
"After pulling the rate trigger on January 17, we expect the Bank of Canada to raise policy rates two more times this year by a total of 50 basis points to address potential inflation risks stemming from an economy pushing against capacity limits," said Guatieri.
