BMO Bank of Montreal Lowers Four-Year Mortgage Rate by One Percentage Point to 5.45 Per Cent
Four-year mortgage rate falls below seven-year average by more than one-and-one- half percentage points

TORONTO, November 8, 2002 - BMO Bank of Montreal is lowering its four-year mortgage rate by one percentage point to 5.45 per cent, effective November 8, giving borrowers the comfort of a longer-term mortgage at shorter-term rates and placing the new rate well below where the four-year rate is likely to be when rates return to more "normal" levels. The Bank of Canada has warned that interest rates will need to rise to more normal levels in the future.

The posted rate on a four-year mortgage has averaged over seven per cent in the past seven years. On that basis, BMO Bank of Montreal's four-year rate represents a one-and-one-half percentage points discount to the average four-year rate of the past seven years and is at its lowest level since its inception in 1983. It is also well below the average one-year rate.

"The housing market, which remains strong, has been driven largely by first-time homebuyers who traditionally seek the security and consistent cash flow that a longer-term mortgage provides," said Gail Kassie, Director, Product Management, Consumer Lending, BMO Bank of Montreal.

"We're noticing that a lot of first-time borrowers are torn between choosing a three-year or a five-year term," said Kassie. "They like the lower rate that a shorter term provides but really want the security of a five-year mortgage. So why not split the difference and get a great rate that's actually lower than either of those two terms and, in fact, beats the two-year mortgage rate as well?"

"Whether you look backwards or forwards, the new four-year rate represents exceptionally good value for homeowners," said Ms. Kassie. "It also provides peace-of-mind in an environment in which interest rates are bound to rise in the years ahead."

On Tuesday, the bank lowered the rates on its other fixed-term residential mortgages. A four-year mortgage at BMO Bank of Montreal now offers the second-lowest fixed-term closed mortgage rate at the bank, behind only BMO Bank of Montreal's one-year term mortgage, which is available at 5.10 per cent.

Fixed Rates:
1 year closed	5.10 %
2 year	5.60 %
3 year	6.00 %
4 year	5.45 %
5 year	6.70 %
7 year	7.55 %
10 year	8.20 %

In addition to competitive rates, BMO Bank of Montreal offers a number of attractive mortgage options that help to lower the cost of borrowing and help give borrowers a break when they need it:

• Mortgage Cash Account - allows customers to build a "borrowing reserve" based on the principal, which they have prepaid. So when cash is needed for anything, it is available without legal or appraisal costs or credit review.

• Take a Break option - lets customers skip up to one month of mortgage payments (principal and interest) in a calendar year.

• Family Care option - unique to BMO Bank of Montreal, customers can skip up to four months of mortgage payments (principal and interest) in a calendar year if the customer or his/her partner is on leave from their place of employment to care for a new baby or ailing family member.

• '20 + 20' prepayment feature - increase mortgage payment (principal and interest) by up to 20 per cent over the current payment. This option can be exercised once each calendar year, at any time, without fee or penalty.

  - prepay up to 20 per cent of the original mortgage principal each calendar year. This option can be exercised in minimum amounts of $100 any time, without fee or penalty.

• AIR MILES - BMO Bank of Montreal customers can earn up to 500 AIR MILES reward miles for taking out a new BMO Bank of Montreal mortgage, adding to an existing mortgage, or switching a mortgage from another financial institution.
  

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Contacts:
Ralph Marranca, Toronto, (416) 867-3996
Lucie Gosselin, Montreal, (514) 877-1101
Laurie Grant, Vancouver, (604) 665-7596