# Press Releases

## Strategy-5 Mortgage: the best of both worlds

Montreal, 30 March 2006 -

National Bank has launched the Strategy-5, a new 5-year mortgage with one of the best interest rates on the market, thanks to a reduction of 1.50% for the first year and 0.30% for the following 4 years.

Buying a home with peace of mind and without neglecting other aspects of one’s life is no small feat. The Strategy-5 Mortgage provides the optimum solution with its 5-year term and an attractive variable rate that is adjusted every year.

This economical solution offers homeowners the best of both worlds: a fixed rate combined with a variable rate. The Strategy-5 Mortgage enables clients to manage their budget effectively and, because of the significant rate discount during the fist year, allows them to repay their principal more quickly than with a fixed-rate mortgage. The rate discounts also free up funds to pay for the additional expenses related to buying a home.

The Strategy-5 Mortgage has a maximum amortization period of 25 years and payments are calculated using the current rate for a 1-year term minus 1.50% for the first year and minus 0.30% for the following 4 years. The payment amount is adjusted annually using the interest rate in effect on the review date.

Here is an example of the advantages of a Strategy-5 Mortgage for a \$150,000 loan:

 5-Year Mortgage Strategy-5 Mortgage Interest rate for the 1st year* 6.45% 4.55% Interest rate for the following 4 years 6.45% 5.75%** Monthly payment \$1,000.20 \$834.38 Principal repaid after 5 years \$14,407.91 \$16,200.76

* Rate on March 29, 2006

** Assuming the interest rate remains the same for the entire term (1-year rate:  6.05%)

5-year fixed-rate APR:  6.45%
APR means “Annual Percentage Rate” and represents the total interest and fees charged by the Bank, expressed as an annual percentage. The example is based on a \$150,000 loan with a 25-year amortization and a fixed rate of 6.45% for a five-year closed term, with no monthly fees.

Strategy-5 Mortgage APR: 5.44%
APR means “Annual Percentage Rate” and represents the total interest and fees charged by the Bank, expressed as an annual percentage. The example is based on a \$150,000 loan with a 25-year amortization and a rate of 4.55% in the first year and 5.75% for the remaining years, with no monthly fees and assuming the rate does not change.