Bank of Montreal has lowered the cost of borrowing in credit cards and personal loans and is helping customers lock in some of the lowest mortgage rates in recent times.
The new initiatives, designed to help customers get through the current economic downturn, will allow homebuyers and consumers to better take advantage of historically low interest rates.
For a limited time:
- Interest rates on pre-arranged mortgages will be guaranteed for 150 days.
- Interest rates for all cash advances and balance transfers to a Bank of Montreal MasterCard are being reduced to 5.9 per cent.
- A line of credit is available to borrowers at the bank's prime rate, which is currently 4.5 per cent.
"With the recent economic downturn, our customers are looking for help and advice about how they can take advantage of the current interest rate environment," said Maurice Hudon, President, Personal Banking Products, Bank of Montreal. "With this program, which we've called Help Provided, the Bank of Montreal Group of Companies will make it easy for them to make the right financial decisions. We want to help them turn this particular time of uncertainty into a time of opportunity."
Mortgage rates will be guaranteed for up to 150 days on pre-arranged mortgages between now and January 31, 2002, the longest guarantee period amongst the major banks. This means a rate locked in on January 15, 2002 is good until June of 2002. Most rate guarantees currently extend to only 60 or 90 days. Customers can take as much as five months to find a home and close the deal. If rates decline in the meantime, the bank will provide any lower rate that results. If rates rise, the bank will guarantee the rate that was negotiated at the time the application was approved.
Currently, mortgage rates are near their lowest level in more than four decades. Fixed rates range from 4.60% for one year, 6.85% for five years and 8.05% for an 18 year open. Variable rates range from an introductory rate of prime minus 2.25% to prime depending on the product selected.
"Spring time is typically a strong home-buying season," said Mr. Hudon. "Being able to lock into these low rates now, rather than waiting, means our customers can take the time they need to shop for their dream home knowing they've secured some of the best mortgage rates we've seen in a long time."
For a limited time, the interest rate applied to cash advances, cheque purchases and balance transfers is being reduced to 5.9 per cent for all existing customers (account must be in good standing to qualify) and for all new MasterCard accounts. The new rate is effective beginning with customers' December statements and will allow customers to save money by moving higher interest rate balances to the lower cash advance/ balance transfer rate.
Cash advances include traditional cash advances through ABM machines, over-the-counter at a branch, through mbanx Direct and paper cheques that are made available to customers from time to time.
The low prime rate will be of interest to customers who currently have higher-interest borrowings. Those who transfer $5,000 to a new Bank of Montreal line of credit or add $5000 to an existing Bank of Montreal line of credit before January 31, 2002, will receive the variable bank prime interest rate - currently 4.5 per cent - on the new amount. The offer is guaranteed until April 30, 2002.
The new offers were introduced as part of an aggressive campaign to help Bank of Montreal customers during these challenging economic times.
The bank is also beginning a targeted marketing campaign across Canada later this week.
Recently, the bank's economics department announced that Canada is officially in a recession and that it did not expect a rebound until mid-year 2002. "Given our understanding of the economic landscape and the historically low interest rates, now is a great time to look at the current cost of your outstanding debt and talk to us about ways we can help you make your payments more affordable," advised Mr. Hudon.
Today's announcement follows two recent announcements for small business:
- On November 8th the bank announced that it is giving its small business customers up to $600 each in the form of a quarter per cent interest credit on their prime based operating loans of less than one million dollars (loans must be in good standing).
- In October, the bank kicked off a small business rate sale by offering loans at the prime interest rate. Today, Bank of Montreal customers can borrow between $50,000 and $250,000 for terms of up to two years at the current bank prime interest rate of 4.5 per cent. The prime rate program also applies to small business lines of credit of up to $50,000.
Bank of Montreal, Canada's first bank, is a highly diversified financial services institution. The bank operates more than 30 lines of business within the Bank of Montreal Group of Companies, including BMO Nesbitt Burns, one of Canada's largest full-service investment firms, and Chicago-based Harris Bank, a major U.S. mid-west financial services provider.
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