BankOfMontreal posts

We Canadians have been pretty spoiled with relatively low rates for some time. But as of yesterday, The Bank of Montreal announced it is lowering its rate on five-year fixed mortgages to 2.99 per cent, an all-time record low in Canada.

This recent announcement is likely to spur competition with our rival banks according to a recent Huffington Post article.

The question is, why should you care?

It's important to have a good relationship with your bank; after all, you're entrusting it with your life's savings, investments and debts -- and paying fees to boot. Luckily for Canadians, we've an array of good banks. But which one should you choose?

In terms of general customer satisfaction, credit union customers are Canada's happiest bankers, according to a Financial Post article based on a poll of more than 2,000 adults compiled by Forum Research in March. The poll shows that 74% of credit union members are "very satisfied" with their institution.

Among the big banks, Bank of Montreal has the highest percentage of happy customers, with 72% saying they are "very satisfied" with the service they receive. But not all banks perform so well.

Home buyers are faced with a tough decision when looking for a mortgage: take a risk on a variable mortgage or choose the security of a fixed-rate?

Variable rate mortgages gained popularity during the financial crisis as the Bank of Canada slashed the benchmark interest rate to a record low 0.5 per cent, causing variable rate mortgage costs to tumble with it. But now that the central bank is hiking rates, even if the key rate is only at 0.75 per cent, it appears fixed rate products are making a comeback.

An article in the Financial Post points out that while variable rates are still low, fixed-rate mortgages are looking quite cheap. Jitters around the globe about economic stability and a second bout of recession have caused investors to pile their money back into government treasuries, which means the yields on the bonds fall. Banks use these yields to determine fixed-rate interest rates, and as a result, fixed-rate mortgage costs are coming down. But just how low are they?