You may see this crazy low rate from BMO being advertised out in the market.
As usual things aren't always as good as they seem.
There are so many ties to the mortgage that you as a consumer should be fully aware of.
Here's a few of them:
-The only way to get out of the mortgage is buy a bona fide sale of you home
-I read this morning that you actually have to qualify at a much higher rate of 5.39%. So very hard to qualify for
-Pre-payment privileges are sliced in half
-Max amortization is 25 years which can hinder a strategic plan of obtaining a longer amortization. Read more below on this.
-No skip a payment option needed if really needed. So this may put you in default if the need ever arose.
These are the main reasons why this mortgage may not be for you. Please consult with a professional mortgage broker such as myself to weigh in on ALL your options. Not just one lenders option. Right now I have access to the same rates with all the options!
In regards to the longer amortization as part of a strategic plan.
Especially if you are not paying for the option to have a longer amortization I like to explain to my clients that it's not a bad option to take. The reason is that you will always have that lower payment to fall back on in case you were in need of some extra cash flow per month. Lose your job etc. The key though is to pay your payments from the start at what the 25 year amortization would be.
I myself took a 30 year amortization on my mortgage and have taken advantage of increased payments etc. and have dropped my overall amortization by almost 10 years.
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