Although it’s certainly not the reason for BMO’s announcement, this is certainly news that’s going to make Finance Minister Jim Flaherty happy. The bank will be ending their discounted offer of 2.99 per cent five-year mortgages that it announced earlier this month. As now stated on the bank’s website, that rate will only be available until the end of the day today. On Thursday it will return to its regular 3.09 per cent.
Now the question is, did this bank too, buckle under the pressure of the Finance Minister? Or was this always a limited time offer for the bank? A spokesperson at BMO says that they never intended to offer the mortgage for a long period of time.
Paul Deegan, vice president of government and public relations at BMO Financial Group said, “From the outset, we have been very clear in our advertising that this 10 basis points reduction was a limited time offer expiring on March 28.”
This seemed to be a preemptive strike at anyone thinking that BMO had caved under pressure from the federal government, as ManuLife did earlier this month when they pulled the same discounted offer after Flaherty’s office phoned to “indicate his displeasure” in the promotion.
But while BMO’s offer did always state that it was going to be for a limited time only, an exact deadline hadn’t been given until just over the past couple of days, when they posted it to their website. Still, making it for a limited time only follows suit with the way BMO has executed their marketing strategies in the past, namely both times this offer was pushed last year.
Kelvin Mangaroo, head of the website RateSupermarket, also says that it’s more likely a marketing ploy than anything else.
“I think it’s more market driven,” he says. “I think they wanted to do a big splash and take it away and look at the results and maybe bring it back again.”
But for whatever reasons the bank had for pulling the discount, is the fact that BMO’s mortgage rate will go up 10 basis points a cause for concern among home buyers? Steve Garganis, mortgage broker, says no.
“The fact that BMO has taken it off the shelf isn’t really significant as far as the Canadian consumer is concerned,” he said.
And that too, falls in line with what mortgage brokers around the country were saying when BMO offered the discount to begin with, when they stated that promotions like this were already being offered, and had been being offered, long before BMO started their campaign.