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Mortgage rates hit rock bottom

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Two of Canada's major banks are offering record-low interest rates in hopes of tempting homeowners to lock in their mortgages with them.

The Bank of Montreal announced on Friday it was offering homeowners a 2.99 percent rate for a standard 5-year fixed mortgage, marking its lowest rate in Canada history.

TD followed suit, offering homeowners a 2.99 percent rate for four years.

John Andrew, the director of Queen's University's Executive Seminars on Corporate and Investment Real Estate, says the moves will add to fears about a potential housing bubble in Canada.

"One big question is how long historically low mortgage rates can sustain housing prices and sales volumes that already appear to be reaching plateaus in many Canadian cities," he said in a statement.

Andrew expects the other major banks to follow TD and BMO in lowering rates.

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