BMO Home Equity Loans Reviews

Taking out a home equity loan or line of credit through BMO can be a more affordable solution than a cash-out refinance. We like that BMO does not charge any upfront fees, like an application fee, and will cover some of your closing costs as well. It also has low introductory annual percentage rates (APRs), although these rates are variable and limited up to one year.

However, we don’t recommend BMO for homeowners with lower credit scores. BMO has a minimum credit score requirement of 650 for a HELOC and 700 for a HELOAN — but even meeting this minimum score will not guarantee the best rates offered.

BMO offers two options for borrowing against your home equity: HELOANs and HELOCs.

HELOANs from BMO have rates starting as low as 8.19% APR as of publishing for a five-year loan. Rates have a lower starting point when you borrow $100,000 or more for a shorter period of time.

HELOCs have a six-month variable intro rate as low as 6.99% APR and a 12-month variable intro rate as low as 8.49% APR as of publishing. These introductory rates cannot be combined with any other discounts during the introductory period.

A 0.50% interest rate discount is available to borrowers who use a BMO checking account to make monthly automatic payments. An additional 0.25% discount rate is applied for select premier banking customers.

You can receive a free estimated rate and payment quote without having to put in your contact information.

While BMO does not charge upfront fees, like an origination fee, for either the HELOAN or HELOC option, there are other fees you need to consider before moving forward.

• Closing costs: Closing costs can range between 2% and 5% and cover charges like the appraisal and document recording fees. BMO said on its website that it will pay many of your closing costs, but you should expect to also pay some of these costs.
• Annual fee: For a HELOC, there is a $75 annual fee for each year of the draw period. However, this can be waived for premier customers.
• Early closure fee: If you decide to close your account within 36 months, you will be charged a closing cost recoupment fee.
• Fixed-rate conversion fee: There is a $75 fee each time you convert a fixed-rate loan.
• Remote application fee: Unless you begin your application online, you will be charged a $100 fee when a remote closing option is selected.

BMO has fairly high credit requirements for both home equity loans and HELOCs:

• HELOANs require a minimum credit score of 700.
• HELOCs typically require a minimum score between 650 and 680.

Note that BMO does not offer HELOANs for investment properties or second homes in second lien. You will also need property insurance and flood insurance if you are in a flood hazard zone.

You can apply for a HELOAN or HELOC with BMO online, in person at a local branch or over the phone. However, even if you apply in person or over the phone, you’ll still need to complete a digital application sent to you via email.

You will need to submit the following information to apply:

• Personal information, like your name and Social Security number
• Income
• Property address and estimated value
• Requested loan amount
• Other debt and financial obligations
• Proof of homeowners insurance and possible hazard/flood insurance

A loan processor will reach out via email or phone within three business days after you submit a completed application, and the full application process typically takes about 30 days. If your loan is approved, you’ll receive a commitment letter and BMO will work with you to schedule your closing and send funds.

We found that the HELOANs and HELOCs from BMO are more affordable when it comes to closing costs compared to some of its competitors. BMO will cover many of your closing costs — as long as you don’t close your account within the first three years. In comparison, competitor Amerisave charges the typical closing costs, which can vary from 2% to 5%.

Additionally, BMO offers a higher HELOC maximum, allowing customers to borrow up to $150,000. Amerisave caps its HELOC at $100,000.

Where BMO falls short is with its high minimum credit score requirements. You will need a score of at least 700 for a HELOAN and 650 for a HELOC. Other lenders, such Rocket Loans, have a minimum credit score of 640.

BMO is a legitimate, FDIC-insured bank that has been around for over 200 years. It offers a huge selection of banking and mortgage products and recently merged with all Bank of the West locations. It was named one of the world’s most ethical companies by Ethisphere for the past six years.