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Canadian mortgage price war breaks out

BMO Bank of Montreal (BMO) has kicked off a Canadian mortgage price war.

From 11 March, BMO is running a three week price promotion offering a five year mortgage at 2.99% and a 10 year deal at 3.99%.

Katie Archdekin, head of mortgage products, BMO said:

“BMO offers two outstanding low-rate mortgages - each come with a shorter amortization which is helping Canadians become mortgage-free faster, pay less in total interest, protect themselves against the possibility of rising interest rates and help secure a debt-free retirement.”

Royal Bank of Canada responded by launching a four year mortgage rate offer of 2.99% available from 9 March.

Marcia Moffat, head, home equity financing, RBC, said:

“Some low rate mortgage offers advertised in the market are highly restrictive. No frills may be great in the supermarket, but it's usually not the best choice for your mortgage.

“RBC mortgages come with all the frills. Our standard features and benefits include accelerated payment and deferral options, prepayment privileges and amortization choices of up to 30 years.”

TD Canada Trust and CIBC have also rolled out four-year fixed mortgage rate offers at 2.99%.

CICB was also quick to point out that its usual mortgage features would apply to the four-year mortgage offer.

The mortgage price war follows forecasts that house prices in Canada are expected to remain flat for the next 24 months.