Four strokes ahead at a tournament-record 14 under entering the day, had three birdies and three bogeys — his first of the week — in the third round at Harbor Shores. He opened with a 62 to match the course and tournament records and had a 66 on Friday.
The 53-year-old Mediate won both of his PGA Tour Champions titles in 2013 after winning six times on the PGA Tour. He had a 14-under 199 total on the Jack Nicklaus-designed layout.
Montgomerie had a 68. The Scot won the major championship in 2014 at Harbor Shores and last year at French Lick Resort in Indiana.
Club pro John DalCorobbo was third at 11 under after a 69. DalCorobbo is a PGA assistant professional at Brickyard Crossing at Indianapolis Motor Speedway. He won the Senior PGA Professional in October to top the club pro qualifiers.
Lone Oak alum Kenny Perry shot 72 on Saturday and is tied for 25th at 5 under.