Financial Post | Business

Bank of Montreal is lowering the rate on its five-year fixed rate closed mortgage to 2.99%, a move that in the past has triggered a rate war among its competitors.

BMO quietly started promoting the new rate on its website Tuesday. It amounts to a 30-basis point drop from the 3.29% it was advertising earlier this week.

The battle between the banks for market share has resulted in greater competition for consumers and, at one point, led to former Finance Minister Jim Flaherty intervening in the market to discourage the discounting. Joe Oliver, the current finance minister, has shown no inclination to intervene in the market.

“This rate change is driven by the fact that bond yields have fallen and we are in what is another busy season for buying a home,” said Paul Gammal, a spokesman for Bank of Montreal. “The offer provides certainty of fixed payments for five years at…

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