TORONTO, ONTARIO — (Marketwire) — 01/05/12 — BMO Bank of Montreal is encouraging potential homebuyers to celebrate the New Year by choosing a mortgage with a 25-year amortization as a way to save thousands of dollars on interest costs and help manage debt levels. BMO offers a 5-year, low-rate, 25-year amortization mortgage at 3.49 per cent.
Canadians have set a record for household debt. According to the Bank of Canada, the debt burden has exceeded levels in the United States and the United Kingdom. The ratio of debt to personal disposable income is now more than 150 per cent. Bank of Canada Governor Mark Carney has issued a warning to Canadians to be cautious with their spending.
“Canadians need to continually examine ways to reduce overall housing costs,” said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal. “BMO has been a leader developing products, such as the low-rate mortgage with a maximum 25-year amortization, that we believe are directly relevant to today-s environment and specifically designed to help Canadian consumers manage their debt. In September, BMO urged Canadians to choose a 25-year amortization as a way to significantly reduce the amount of interest paid over the life of the mortgage.”
Ms. Archdekin added, “It is important for homeowners or potential buyers to be prudent and stress-test their mortgage against a higher interest rate to ensure they can afford what they signed up for. Total housing expenses should not consume more than one-third of total household income.”
BMO Bank of Montreal-s popular five-year fixed low rate mortgage is available to all Canadian residents at a posted rate of 3.49 per cent.
BMO offers the following tips for Canadians to help them reduce mortgage debt and become mortgage free faster:
Consider a shorter amortization:
Make sure you can afford your home, both now and in the future:
Think about the future:
Make a larger down payment:
Make pre-payments when you can:
Think carefully about fixed vs. variable:
Contacts:
Media contacts:
Matthew Duffin, Toronto
(416) 867-3996
Sarah Bensadoun, Montreal
(514) 877-8224
Laurie Grant, Vancouver
(604) 665-7596