He was elected to Parliament in 1689 and appointed a lord of the Treasury three years later. By devising a system of guaranteed government loans, Montagu financed British participation in the War of the Grand Alliance with France (1689–97) and initiated the national debt. With another set of loans he established the Bank of England in 1694. Shortly thereafter he became chancellor of the Exchequer and a member of the small group of Whig leaders known as the Junto. Elected to Parliament in 1695, he at once pushed through a controversial scheme of national recoinage. In 1697 he became first lord of the Treasury and leader of the House of Commons. He resigned under pressure from a Tory-dominated Parliament in 1699, and in 1700 he was made Baron Halifax. When George I assumed the crown in 1714, Montagu was appointed first lord of the Treasury and created an earl, but he died (without issue) after only seven months in office.

Halifax was a minor poet and a literary patron; with Matthew Prior he wrote The Country Mouse and the City Mouse (1687), a witty parody of The Hind and the Panther by Dryden.