A New Leader in Mortgage Rate Holds: BMO

BMO now has the longest regular rate guarantee period of any Big 6 Bank.

On Tuesday, Canada’s fourth largest bank upped its rate hold period from 90 to 130 days. Prior to that, 120 days was the longest normal rate hold of any big bank.

Note: “Normal” rate hold means a rate hold that applies to the lender’s regular rates. Banks have extended rate holds up to three years, but those rates are much higher.

Here’s how Canada’s biggest lenders stack up:

• RBC: 120 days
• TD: 120 days
• Scotiabank: 120 days
• BMO: 130 days
• CIBC: 90-120 days
• HSBC: 90 days
• National Bank: 90 days
• Desjardins: 90 days
• First National: 120 days
• MCAP: 90-120 days

The average Canadian mortgage closes in just 45 days or so, but long rate holds are invaluable when rates are rising and you have a far-off closing date.

It’ll be interesting to see if these longer rate holds affect BMO’s mortgage pricing, however incremental it may be. Longer holds require higher hedging costs for the lender, so going from 90 to 130 days is not free. And banks aren’t famous for eating cost increases.

One further note. BMO’s new 130-day rate guarantee also applies to refinances and switches. The majority of 120-day holds in the industry only apply to purchases.

Rate hold tips:

• Some of the lowest mortgage rates are only available on “Quick Closes” (i.e., closes within 30 days or less)
• Most lenders give you the lowest of your guaranteed rate or their current rate at the time of, or just before, your closing.
• Some promotional mortgages have locked-in rates that cannot drop, regardless of whether rates drop in general. This is called a “no float down” policy.