Canadian Finance Minister Jim Flaherty told Bank of Montreal officials he didn’t like the company’s reduction in a five-year mortgage rate to 2.99 percent at a time he is warning households about excessive debt.
“I spoke with them about that this week and expressed my concern,” Flaherty told reporters in Ottawa today. “I thank those Canadian financial institutions that have not chosen to reduce their rates further.”
Flaherty reiterated there have been welcome signs the housing market is slowing after a surge that helped push consumer debt loads to record highs.
“I encourage responsible lending,” Flaherty said. He didn’t specify who he spoke to at Bank of Montreal.
Bank of Montreal, Canada’s fourth-biggest bank, said in a March 4 statement that it cut the mortgage rate from 3.09 percent.
“BMO’s efforts to encourage Canadians to pay down debt and build equity in their homes have been aligned with Minister Flaherty’s timely and prudent actions to encourage moderation in the housing market,” Ernie Johannson, senior vice president of personal banking Canada, said in the statement.
Paul Deegan, spokesman for the Toronto-based bank, declined to comment on Flaherty’s reaction today.