With a history stretching back to 1882, BMO Harris Bank is the eighth largest bank in North America by assets and is a trusted name in the home equity loan industry. For those wondering what equity is in the context of homeownership, it is simply the amount of value exceeding the loan balance that a homeowner has in their home. To calculate how much equity you have in your home, you can subtract what you owe on your mortgage from the appraised market value of your home.
Home equity loans provide a way for homeowners to access this equity as cash they can spend for any number of purposes. BMO Harris Bank offers several competitive options for those looking to do so. Whether you are looking into how to get a home equity loan or searching for the best ho me equity loan options, there are several critical factors to consider when choosing a lender. In this comprehensive review of BMO Harris Home Equity Loans, we'll examine the different home equity products the bank offers, rates and fees, customer satisfaction ratings, and how accessible its products are to help you decide if BMO Harris is the right lender for you.
Best for borrowers with good credit
One advantage to choosing BMO Harris Bank is that it offers exceptionally competitive rates for borrowers with good credit. In order to qualify for a home equity loan, most borrowers will need to have a minimum credit score of 700, which is relatively high compared to what other lenders require. Those with even higher scores may get more favorable offers, especially when it comes to the lender's fixed-rate Home Equity Line of Credit (HELOC) loan options.
BMO Harris Bank home equity loans pros and cons
- Offers special six-month introductory rate for HELOCs
- Covers most fees and closing costs if the borrower keeps the loan or line of credit open for at least three years
- 0.5% rate discount for automatic payments
- No application fees
- Fixed-rate option available for HELOCs
- High minimum credit score of 700 required for home equity loans
- Online quotes only available for eight states (Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin)
- HELOCs come with a $75 annual fee
- Remote closing not available for all transactions
BMO Harris home equity loans offerings
BMO Harris offers both home equity loans and home equity lines of credit for a large variety of eligible properties.
A home equity loan is a lump-sum loan secured by the equity in your home. These loans come with fixed rates and payments along with a preset loan term. They are ideal for large expenses like home improvements, college tuition or debt consolidation.
Home equity lines of credit are revolving lines of credit secured by the equity in your home. This type of loan involves an initial draw period when borrowers can make withdrawals up to their established credit limit and only have to make interest payments. After the initial draw period (typically between 5-10 years) borrowers will enter a repayment period during which they must pay back the loan principal. Unless you choose a fixed-rate option, payments and interest rates vary depending on market conditions.
Both loan types have competitive rates and relatively flexible terms. In addition, BMO Harris offers special introductory rates for HELOCs, as well as discounts of 0.5% for automatic payments. It's also important to note that the interest on HELOCs and home equity loans may be tax deductible depending on your individual circumstances.
Home equity loans
Home equity loans from BMO Harris require a minimum credit score of 700 and come with the following terms and features:
- Loan amounts: Borrowers can borrow as little as $5,000 with no maximum loan amount listed by the company.
- Term lengths: Loan terms of 5, 10, 15 and 20 years are available.
- Interest rates: Fixed interest rates
- Fees: No application fees and low to no closing costs. For loans secured by an owner-occupied one to four-family residence and kept open for at least 36 months, all closing costs related to the loan will be waived. This includes flood determination, title insurance, appraisal charges, credit report fees, document recording fees, and mortgage and government taxes. The borrower is responsible for the title fees as well as mortgage and government taxes if the loan amount is $500,000 or greater.
Home equity lines of credit
Home equity lines of credit from BMO Harris have a minimum credit score requirement that is typically between 650 and 680 and come with the following terms and features:
- Loan amounts: There is no maximum loan amount listed by the company. The total amount of the loan may be limited based on your property’s value and loan-to-value ratio (the ratio of the loan amount to the value of the property).
- Term lengths: A 10-year draw period with repayment periods of 5, 10, 15, 20 and 30 years available.
- Interest rates: Both variable and fixed interest rates are available. The variable interest rate may fluctuate over the life of the loan and is based on the prime rate. The prime rate is the rate that banks charge for loans to creditworthy customers and is based on the federal funds rate. BMO Harris offers a six-month introductory rate for variable rate loans that ranges from the prime rate minus 2.01% to the prime rate minus 1.01% depending on your combined loan-to-value (CLTV) ratio. CLTV ratios are a measure of the total amount of secured loans on a home compared to its appraised value or sales price. It is used by lenders to determine the total risk of a loan.
- Fees: Similar to the home equity loan product, there are no application fees and the same rules for waiving closing costs and other fees related to the loan apply. The borrower is still responsible for the title fees as well as mortgage and government taxes if the loan amount is $500,000 or greater. BMO Harris charges a $75 dollar annual fee for HELOCs.
Borrowers can use the fixed-rate lock option on part or all of their drawn loan amount. They can use this option for all loan terms, but it cannot be used for amounts below $2,000. The locked-in rate is determined by when the lock is made and could be subject to an interest rate adjustment. Each time a fixed rate is locked in, the borrower will be charged a $75 fee. Also, at any given time, a maximum of only three fixed-rate lock options are allowed. ]
If you're unsure about opening a HELOC, be sure to read our guide on the pros and cons of a home equity line of credit for a better understanding of the risks associated with these loans.
BMO Harris home equity loans pricing
BMO Harris interest rates and terms for home equity loan products are relatively competitive when compared to other banks and lenders. The lender is also willing to cover all or nearly all closing costs for its home equity loans and HELOCs as long as the lender keeps the loan open for at least three years. This can go a long way in keeping borrowing costs down and making your home loan more affordable.
BMO Harris financial stability
BMO Harris is a large bank with a long history of providing financial services. The lender has an AA- credit rating from Fitch for its long-term debt outlook, which is its second-highest rating available, and an F1+ rating for its short-term debt outlook. The company also earns an A+ rating from Moody’s for long term local currency stability. All of these ratings indicate that the lender is financially stable and able to meet its financial obligations.
BMO Harris home equity loans accessibility
BMO Harris offers home equity loans and HELOCs to customers in all 50 states. You can visit the bank’s physical branches in eight states: Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin.
BMO Harris customer service can be reached at over 500 branches in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin. Customers in other states can check rates and apply for a loan online. For general inquiries and customer support, you can also contact BMO Harris at 1-888-340-2265 Monday through Friday from 7am to 10pm Central Standard Time and 8 a.m. to 8 p.m. on Saturdays and Sundays.
The webpages from BMO Harris dedicated to home equity loans and HELOCs are well-structured and make it easy to find the information potential borrowers need. There are several useful links to educational materials about home equity loan and HELOC-related topics, as well as a handy tool to calculate estimated payments for each product. The process of obtaining online rate quotes is easy and straightforward, allowing customers to see estimated rates and terms immediately.
BMO Harris home equity loans customer satisfaction
BMO Harris is accredited by the Better Business Bureau and currently holds an A+ rating. Although the bank currently holds a 1.07 out of 5-star customer review rating on the platform, it has successfully closed out over 200 customer complaints over the last year and promptly responds to inquiries and complaints. This demonstrates the lender’s commitment to providing excellent customer service and satisfaction.
While BMO Harris has been the subject of 134 mortgage-related complaints to the Consumer Financial Protection Bureau, this amounts to a very low complaint index of less than 0.01. Reviews on other popular review sites are also mixed. But it's worth noting that many of these reviews are aimed at BMO Harris’ banking services as a whole, rather than its home equity loan and HELOC products specifically.
BMO Harris Home Equity Loans FAQ
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How we evaluated BMO Harris home equity loans
To evaluate the home equity loan and HELOC products from BMO Harris Bank, we looked at a range of factors from its rates and fees to its loan terms and customer reviews. The following are the most important criteria we considered:
- Interest Rates: We compared the interest rates on BMO Harris Bank’s loan products to other home equity loan lenders.
- Fees: We looked at the fees BMO Harris Bank charges for its home equity loans and HELOCs, such as origination fees, closing costs and annual fees.
- Loan Terms: We evaluated the loan terms offered by BMO Harris Bank, such as the maximum loan amount, repayment period and term lengths.
- Financial Strength: By examining ratings from major credit rating agencies, we were able to evaluate BMO Harris Bank’s financial strength.
- Customer Reviews: We evaluated customer reviews from independent review sites to see how BMO Harris Bank’s offerings scored in terms of customer satisfaction.
- Accessibility: We evaluated how accessible BMO Harris Bank’s home equity loan and HELOC products are to potential applicants and how user-friendly the application process is.
Summary of Money's BMO Harris home equity loans review
If you're wondering how to get a home equity loan with bad credit, BMO Harris Bank is likely not the best choice. The bank's home equity loan has a fairly high minimum credit score requirement of 700, leaving those with less-than-perfect credit out of the running. But if you do qualify for a home equity loan or HELOC with BMO Harris Bank, you can enjoy competitive interest rates, low to no fees, flexible loan terms and a straightforward application process. While it's still a good idea to shop around and compare different lenders before applying for a home equity loan, BMO Harris Bank is certainly worth considering, particularly if you have a strong credit profile.