The Bank of Montreal (TSX:BMO) is lowering its rate for a five 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 and 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.