[JimmytheT]

First of all, they are more than allowed to do it. Almost all personal loans (as well as business loans) are ON Demand. Meaning that these loans can be called in at any time for any reason. Most banks would only call a loan for a good reason such as arrears, or fraudulent activity, as calling good loans makes little business sense.

If you had a Residential Mortgage loan, that was locked into a term (either variable or fixed), this rate change could not be done until the term expires. However with Lines of Credit, this demand feature also allows rate changes at any time. So yes, they are more than allowed to do this.

If you have a Prime - 0.5% rate, that will likely change, because with the current prime lending rate where it is banks actually lose money on loans at this rate. So to the guy that said, "Bye bye BMO", I highly doubt you will find a rate less than Prime + 1% anywhere else with the marketplace the way it is currently.

By the way, I do not work for BMO, but I do work in the industry.