BMO Mortgage Review 2023

BMO mortgage at a glance

BMO is one of Canada’s Big 6 banks. It is a direct lender that offers a variety of mortgages, as well as other financial products like credit cards, bank accounts, investment services and wealth management.

BMO mortgage full review

The Bank of Montreal (more commonly known as BMO) was founded in 1817, and it is Canada’s oldest bank. BMO is now the eighth largest bank in North America and reported total assets of more than $1 trillion in 2022. BMO is one of Canada’s Big Six banks and offers a large variety of financial services, including credit cards, bank accounts, investment services, insurance and wealth management. 

BMO is a direct lender that offers numerous kinds of mortgages, including fixed- and variable-rate options, as well as open and closed mortgages. Mortgages are available for new homeowners and those looking to refinance or renew their mortgages. In addition to offering mortgages for primary residences, BMO also has options for investment properties and second homes. BMO has a mortgage transfer service to help smooth the process of transferring a mortgage over from a different provider. 

Two features of BMO’s mortgage offerings worth highlighting are the Homeowner ReadiLine and the 130-day mortgage rate guarantee. The Homeowner ReadiLine has both a secured line of credit and a mortgage, and allows you to allocate your borrowing between the two. As you pay down what you owe on your mortgage, your available line credit increases. BMO’s 130-day mortgage rate guarantee locks in your rate for a fixed-rate mortgage for a residential property for just over four months, 10 days longer than any other big bank in Canada.

How to choose the right mortgage lender

Selecting the right mortgage provider is a big decision. A mortgage is a large debt, and you want to make sure that you’re getting the best deal possible. You’ll need to do some research, make a list of what’s important to you, and spend some comparing offers from the different types of providers. You can start by following these steps:

1. Decide your budget: It’s important to have an idea of how much mortgage you can comfortably afford before talking with lenders. They may offer you more than you want to spend; it’s important to be ready for that conversation.
2. Understand the different types of lenders: Mortgage providers include banks, credit unions, brokers, alternative lenders, and private lenders. Each has its pros and cons.
3. Compare offers from three different lenders: To ensure you have a good idea of what’s out there, consider seeking mortgage pre-approval from a big bank, a broker and one other type of alternative lender.
4. Don’t focus too much on rates: The interest rate is just one part of the mortgage equation. Yes, you want the most competitive rate possible, but it’s also important to weigh the reputation of the lender, the quality of customer service they provide, the types of loans they offer, the fees they charge, and the flexibility of terms they may offer.

» LEARN MORE: Read our guide to choosing a mortgage lender

BMO mortgage feature overview

Mortgage variety

BMO mortgage products are comparable to those offered by Canada’s other major banks.

The bank provides a selection of residential mortgage products, such as fixed-rate, variable-rate, open and closed mortgages, plus a convertible mortgage.

One mortgage product that may be appealing to prospective home buyers is BMO’s Homeowner ReadiLine mortgage, which combines your BMO mortgage with a revolving line of credit. As you make payments on your mortgage and pay down your balance, the amount you can borrow from your line of credit increases. Similar products are offered at most of the major banks. 

The bank also shares promotional offers, such as getting cash back or special rates on GICs and savings accounts when you get a BMO mortgage.

Ease of application 

If you’re considering a BMO mortgage, you can apply online for pre-qualification, which doesn’t affect your credit score but gives you an estimate of how much you might be able to borrow. Pre-qualification with BMO also will allow you to lock in a fixed rate for up to 130 days, and answering the questions only takes a few minutes.

You also can apply for a BMO mortgage pre-approval, which is a more involved process and includes a hard check on your credit file. However, it gives you a much more solid understanding of your potential financing. You can apply online and BMO says it will take 10 minutes.

Finally, you can connect with a BMO mortgage expert in person, by phone or via email.

Loan amounts and terms

The maximum mortgage amount that BMO might offer is not clearly stated on the website, but the special offers page mentions mortgage values of more than $1 million, as of September 2023. BMO mortgages come in a wide variety of terms ranging from six months to 10 years (though term options vary based on the type of mortgage). For example, BMO’s rates page only shows three- and five-year terms for variable-rate mortgages.

Mortgage rate transparency 

BMO publishes a full page of its current mortgage rates on its website. The APR for most of the rates displayed on the site is based on a $350,000 mortgage with a 25-year amortization and an appraisal fee of $300 (which may or may not be required to complete your mortgage application). The bank also clearly displays its prime rate. The fine print notes that interest for a fixed-rate mortgage is calculated half-yearly, whereas interest for variable-rate mortgages is calculated monthly.

Rate types

BMO has both fixed- and variable-rate mortgages. Fixed rates can be open, closed or convertible, and variable-rate mortgages can be 5-year closed or 3-year open.

Mortgage fees 

BMO does not provide much detail about fees. The terms and conditions on the rates page note that prepayment charges apply when switching from a fixed-rate mortgage to a variable-rate mortgage and mention a potential $300 fee for a home appraisal. When explaining closing costs, which include mortgage fees, BMO suggests budgeting 2% to 4% of the total cost of your home.

Security and safety 

When you begin to fill out your online application for pre-approval, the website notes that your personal data is protected and that you can learn more by reading the bank’s Privacy Code.

BMO mortgage eligibility requirements

To apply for pre-approval for a BMO mortgage, you need to:

• Be a Canadian resident with a Social Insurance Number (SIN)
• Be the age of majority in your province or territory
• Plan to live in the home for which you’re applying for a mortgage 
• Have been employed for a minimum of two years and have documentation showing your gross income (such as tax returns)

For most mortgage types, BMO Mortgage does not publish specific eligibility criteria. However, for the BMO Smart Fixed Mortgage, requirements include: 

• You must plan to live in the home.
• You must have a credit score of at least 600. 
• Your gross debt service ratio must be less than 39%.
• Your total debt service ratio must be less than 44%.  

Nerdy Tip: Use a mortgage affordability calculator to determine how much you can afford to pay for a home. If you have a unique situation or need additional information about the eligibility requirements, it’s best to speak directly with a mortgage specialist.

How to apply for a mortgage with BMO 

To apply for a BMO mortgage, you can fill out the online questionnaires for either pre-qualification or pre-approval, depending whether or not you’re ready for a credit check. You also can contact a BMO mortgage specialist via email or phone, or book an in-person appointment to chat about your options.

If you’re ready to start the mortgage approval process and already have an idea of your home-buying budget, here’s how to apply for pre-approval. You’ll need to be a Canadian resident who is at least the age of majority in your province or territory. You’ll also need to plan to live in the home and be able to show that you’ve been employed for at least two years. Follow these steps:

• Click “Get Pre-Approved” on any BMO mortgage page and choose whether you’re applying as an individual or with another person.
• Answer questions about the cost of the home you’re buying, or the value of your current home if you’re refinancing or switching your mortgage to BMO. 
• Provide your down payment amount (for homes under $1 million, you must provide 5% of the first $500,000 and 10% of the remainder, and you’ll also need mortgage insurance. Homes over $1 million require a down payment of 20% of the purchase price). 
• Select the term length (pre-approval is only available for fixed terms). 
• Provide information about your monthly expenses and whether you’re a first-time home buyer.
• Fill in your name, contact info and SIN number (optional). 
• Provide employment information and list any additional sources of income.
• Review and submit your pre-approval application. 
• Wait to be contacted by a BMO mortgage specialist.

If you’re interested in getting a mortgage for a second home or an investment property, you’ll likely need to contact BMO for pre-approval as it doesn’t appear you can get pre-approved online for those more complex situations.

Alternatives to a BMO mortgage

About the Author

Sandra MacGregor

Sandra MacGregor is a freelance writer who has been covering personal finance, investing and credit cards for over a decade. Her work has appeared in a variety of publications like…

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