Prime rate
The benchmark rate each Canadian bank sets for pricing variable-rate mortgages, HELOCs and lines of credit. The big banks' prime normally moves in step with the Bank of Canada's policy rate. As of the Bank's September 2, 2026 decision, the policy rate is 2.25% and big-bank prime is 4.45%.
Big-bank prime has sat 2.20 percentage points above the Bank of Canada's policy (overnight) rate. When the Bank changes its rate at one of its eight scheduled announcements a year, the large banks typically announce a matching prime change within about a day. Each lender sets its own prime, so a few lenders' prime can differ.
Your variable mortgage, HELOC, and most lines of credit are priced as prime plus or minus a spread, so a 0.25% cut to prime directly lowers your interest cost (or, on a fixed-payment variable, sends more of each payment to principal). Fixed mortgage rates are not tied to prime; they follow Government of Canada bond yields more closely.
Our prime-rate page tracks the current rate and the next Bank of Canada announcement date.
Worked example
Illustrative: a variable mortgage at prime − 0.50% is 3.95% with prime at 4.45%. If the Bank of Canada cut by 0.25% and prime followed, the rate would become 3.70%. On a $400,000 balance that's roughly $1,000 less interest a year ($400,000 × 0.25%).
Illustrative figures only, rounded; not a quote or current rate. See today’s rates on our live board.
Sources
- Key interest rates (policy interest rate) (Bank of Canada)
- Canadian interest rates (incl. chartered bank prime) (Bank of Canada)
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