Prime rate
The benchmark each Canadian bank uses to price its variable-rate products. Each bank sets its own, but they all move within 0.05% of each other and only after the Bank of Canada moves its overnight rate.
Prime sits roughly 2.2% above the Bank of Canada's overnight policy rate. When the Bank moves at one of its eight scheduled announcements a year, the banks almost always pass the change through to prime within a day or two.
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. Fixed mortgages are not tied to prime — they track bond yields instead.
Watching the Bank of Canada's rate path is the single best predictor of where variable costs are heading; our prime-rate and forecast pages track it in real time.
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