Real Estate

BMO Insists on Paying Property Tax with Mortgage Payment

  • Last Updated:
  • Feb 27th, 2018 10:40 am
[OP]
Newbie
Feb 20, 2018
4 posts

BMO Insists on Paying Property Tax with Mortgage Payment

Hey guys, the internet is not giving me a clear answer on this. Basically, in my BMO property tax account, after two years of mortgage (CMHC, we had 5% down) we have almost $1000 sitting there because our property taxes are low and they are taking double what they need to take, and holding it in escrow.

I reached out in person at an appointment, told him that from what I read, the loan to value ratio was now below what I thought was the minimum to pay the property taxes yourself, and requested that they deposit those funds into my bank account instead of holding it in escrow. He typed a bit on his computer, and told me no problem, he sent off the request!
A week later, I heard nothing, so I emailed, and I got this response:

"So our property tax team came back to me and said that they were unable to close the account because the mortgage is still default insured. This will continue for the duration of the mortgage. if you bring me your property tax notice I can see if we can get the amount withdrawn reduced down to the lowest amount."

So basically, I can't have money that is being double-paid ? It seems backwards to me.
What should I do, should I try and go above this guy and speak to someone else? I can't even find documentation of where this is mandatory or it's some arbitrary bank rule.

Help!
6 replies
Banned
Feb 23, 2009
1670 posts
1495 upvotes
Oshawa
Welcome to reality.
Banks think you are a credit risk and like to collect in advance from you.
They also make money off your money.
Solution: Buy bank stocks and always have at least 20% down.
Deal Guru
Feb 29, 2008
14586 posts
10824 upvotes
That's what happens when you put 5% down.
Member
Jan 6, 2012
273 posts
79 upvotes
TD started doing that to me and I screamed that I took my mortgage with them to keep it under $1200 and i refused to pay a penny more. they yielded. when i paid my mortgage off, i was so happy to be rid of them digging into my pockets for more tax money. yes, i paid with 5% down.
Deal Addict
Feb 16, 2018
1292 posts
1296 upvotes
Banks can do that if they deem you a risk. if $1k sitting there for a few years is causing you any sort of hardship at all because you need that money than it's probably a good idea for the bank to hold it.
Deal Addict
Jan 15, 2017
4103 posts
3608 upvotes
The guy told you what to do next. Bring a copy of your property tax bill that clearly shows that the bank is over estimating the tax amount and request a readjustment.
[OP]
Newbie
Feb 20, 2018
4 posts
Thanks for the tips, guys. I forgot to mention that we've made $16,000 in lump sump payments in the two years, so I figured that would have some merit.. I guess the down payment equaling 20 % has to be done at the beginning or it doesn't matter though. It's not causing us any hardship to have the money there, but it would be better somewhere it was collecting actual interest.

Top