In order to remain competitive and not lose market share BMO's move will likely prompt the other four big banks to lower their rates for the short term as well.
If you're thinking of breaking your mortgage to take advantage of this lower rate keep this in mind.
Understand clearly from your current financial institution the penalty that you will be paying to get out of your current mortgage. The younger your mortgage term the more expensive it will be and the higher rate you are locked in at right now will mean you pay more of an interest rate differential.
Blend and Extend
If the bank is giving you the option to blend and extend, make sure you understand how much interest you will be paying over the life of the mortgage. If you have already made a sizable dent in your loan you may not want to extend your amortization and pay more interest over the long term.
Pay more than 2.99%
If you are lucky enough to get into this mortgage without any major penalties start paying your mortgage bi-weekly at a rate that represents 4.99 per cent. This does two things, one it reduces your amortization schedule significantly and it prepares you for higher interest rates when you renew in 5 years time.