Will lower the required down payment for mortgages; homebuyers could
save an average of $2,500 in insurance premiums
TORONTO, April 20 /CNW/ - BMO Bank of Montreal today announced that it
will be ready to offer 20 per cent down mortgages without requiring mortgage
insurance as soon as Bill C-37 becomes law. The new legislation is expected to
be proclaimed by April 24, 2007. BMO's announcement will ensure that
qualifying customers will be able to take immediate advantage of the cost
savings associated with the new law.
Under the existing Bank Act regulations, a bank cannot provide a mortgage
loan for more than 75 per cent of the value of the property, without having
the customer purchase mortgage insurance. Bill C-37 raises the loan to value
ratio requiring mortgage insurance from the current 75 per cent to 80 per
"We believe that a great number of home buyers will benefit from this
change and we are delighted to be able to take a leadership position in making
this new option available immediately," said Cid Palacio, Vice President, BMO
Bank of Montreal.
Ms. Palacio noted that based on an average home price of $300,000, a home
buyer with only a 20 per cent down payment can now save an average of $2500 in
"We see a number of customers scrambling to meet the 25 per cent down
payment, in order to avoid paying the insurance premium," said Ms. Palacio.
"This often means that they are dipping into their credit cards or rainy day
savings, to make up the difference. These changes will allow those homebuyers
to reduce their down payment and get into their new home faster.
"This is also good news for young, prospective first time home buyers who
are saving for a down payment," she added. "We encourage anyone who wants to
take advantage of the new mortgage options to speak with their BMO mortgage
specialist to determine how they can benefit from the changes."
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly
diversified North American financial services organization. With total assets
of $356 billion as at January 31, 2007, and more than 35,000 employees, BMO
provides a broad range of retail banking, wealth management and investment
banking products and solutions. BMO Financial Group serves clients across
Canada through its Canadian retail arm, BMO Bank of Montreal.
For further information:
For further information: Michael Edmonds, Toronto,
firstname.lastname@example.org, (416) 867-3996, Ronald Monet, Montreal,
email@example.com, (514) 877-1101; Laurie Grant, Vancouver,
firstname.lastname@example.org, (604) 665-7596; Internet : www.bmo.com