BMO Introduces Teaser Rate??

Last week, an article ran in the Globe and Mail, with limited fanfare, entitled “BMO move spurs rivals to drop mortgage rates”.

Here are the first two paragraphs of the article:

A gimmick by Bank of Montreal (BMO-T58.25-0.41-0.70%) to attract new mortgage customers in a traditionally sluggish month for sales has sparked a mini price war among rival banks.

A day after BMO announced it had dropped the rate on a five-year fixed-rate mortgage to a historic low of 2.99 per cent as part of a two-week promotion, Toronto-Dominion Bank (TD-T77.750.050.06%) and Royal Bank of Canada (RY-T52.09-0.68-1.29%) followed suit with limited-time-offers of their own.

The article goes on to say that this supposed promotional rate may be held over for much longer than the anticipated two week period. 

Now did anyone else notice the types of words used in just two brief paragraphs?

“Gimmick…..promotional……price war”.

So what are they saying here?  Sales are slow enough that there are now “teaser” rates targeting the marginal home buyer .  What does that spell?  Disaster for these fools who jump in head first thinking a 5 yr fixed rate of 2.99% will last forever.  Fast forward five years to renewal time.  If you are a marginal buyer at 2.99%, what does that make you at 7%?  Probably a cash-strapped, paycheck to paycheck, owner of a house worth less than it was five years ago…..Sound familiar?

I’m no economist Mr. Carney, but can someone please do something about this before it is too late?