03/17/2015 07:39 EDT | Updated 05/17/2015 05:12 EDT

Bank of Montreal lowers interest rate on 5-year, fixed mortgage to 2.79%

Bank of Montreal has lowered its five-year fixed mortgage rate to 2.79 per cent from 2.99 per cent, effective immediately.

The rate cut comes ahead of the key spring real estate season. The latest numbers from the Canadian Real Estate Association show that Canada's housing market continues to crank out gains, with the average price up more than six per cent to over $430,000 last month.

Those gains are coming at least in part on the back of lower rates, which have been compelling Canadians to buy more houses at lower than usual interest rates.

BMO is the first of Canada's big banks to significantly alter its benchmark interest rate since the Bank of Canada surprised markets with an unexpected rate cut in January.

Five-year mortgages are one of the most common ways for Canadians to finance the purchase of a new home.

When one of the big banks moves its rate in a significant way, it's not uncommon for some or all of the rest to follow suit.

Aside from its key five-year rate, BMO left its other rates unchanged Tuesday.