BMO is raising its five-year residential mortgage rates by 10 basis points.

Effective March 29, 2013, the new interest rate will be 3.09%.

“Protect yourself from rising rates by locking in for five years and become mortgage-free faster by choosing a maximum amortization of 25 years,” says Ernie Johannson, senior vice president, personal banking Canada, BMO Financial Group. “This mortgage is the responsible choice for the times.”

BMO had dropped its posted five-year fixed mortgage rate on March 4 to 2.99% in what was expected to be the start of a new round of mortgage wars.

However, the federal government quickly moved to prevent other banks from following suit, in addition to getting Manulife to reverse its discount rate just a day after it was introduced.

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