The Bank of Montreal is lowering its rate for a 5-year fixed mortgage amid concerns about a cooling housing market.

Effective immediately the rate will drop to 2.99% from the current 3.09%.

The other big banks could follow suit.

Last month, Canada Mortgage & Housing Corp. said new housing construction is expected to be lower this year due to moderate economic and employment growth in the second half of 2012.

The Teranet-National Bank index of Canadian housing prices in January continued to show the effects of a cooling trend that has hovered over the real estate market for more than a year.

The index was at 153 last month, up just 2.7% from January 2012, the lowest 12-month growth rate since November 2009.

(The Canadian Press)