Prime rate in Canada today.
Prime drives every variable-rate mortgage and HELOC in Canada. It moves with the Bank of Canada’s policy interest rate — here’s the full history, and exactly how a change hits your payment.
The prime rate in Canada is 5.95% today (Jun 16, 2026), set as the Bank of Canada’s overnight policy rate of 3.75% plus the conventional 2.20% spread. It drives variable mortgages (priced prime − discount) and HELOCs (prime + margin); fixed mortgages aren’t affected during the term. A 0.25% move changes a $500,000 variable payment by about $71/month.
Bank of Canada rate history (2020-2026)
The overnight policy rate and the resulting prime rate through the pandemic cuts, the 2022-23 hiking cycle, and the cuts that followed.
| Date | BoC overnight | Prime |
|---|---|---|
| Mar 2020 | 0.25% | 2.45% |
| Mar 2022 | 0.50% | 2.70% |
| Jun 2022 | 1.50% | 3.70% |
| Oct 2022 | 3.75% | 5.95% |
| Jan 2023 | 4.50% | 6.70% |
| Jul 2023 | 5.00% | 7.20% |
| Jun 2024 | 4.75% | 6.95% |
| Dec 2024 | 3.25% | 5.45% |
| 2025-26 | 2.75% | 4.95% |
How the prime rate works — and hits your payment
What prime is. Prime is the benchmark interest rate Canada’s banks use to price variable-rate lending. The banks set it, but they move it in lock-step with the Bank of Canada’s overnight policy rate — almost always prime = overnight + 2.20%. So when you hear the Bank “raised” or “cut” rates, prime is what changes for borrowers within days.
How it reaches your mortgage. A variable mortgage is quoted as prime minus a discount — say prime − 0.90%, which at today’s 5.95% prime is 5.05%. A HELOC is prime plus a margin, interest-only on the drawn balance. Fixed mortgages are different: they track Government of Canada bond yields, are locked for the term, and a prime change doesn’t touch them until renewal.
A worked example. Take a $500,000 variable mortgage at prime − 0.90% (5.05%) over 25 years — about $2,922/month. If the Bank cuts 0.25%, your rate falls to 4.80% and the payment drops by roughly $71/month (~$852/year); a hike does the reverse. On a “fixed-payment variable,” the payment stays level and the split between principal and interest shifts instead. Model your exact numbers in the payment calculator, or see what a renewal jump looks like in the payment-shock calculator.
Where it goes next. The level of prime, and where it sits in the cycle, is central to the fixed-versus-variable decision. Read our mortgage rate forecast for where the Bank of Canada may head, then compare 5-year variable against 5-year fixed on today’s board.
What the prime rate means for your mortgage — in 6 points
Prime moves your variable rate
A variable mortgage is quoted as prime minus a discount (e.g. prime − 0.90%). When the Bank of Canada changes the overnight rate, prime follows within days and your rate moves with it.
It's set by one number
Banks set prime, but in lock-step with the Bank of Canada's overnight policy rate — almost always prime = overnight + 2.20%. So eight times a year, the Bank's decision is what actually moves your payment.
HELOCs ride prime too
A home equity line of credit is priced as prime plus a margin (e.g. prime + 0.50%), interest-only on the drawn balance — so HELOC costs rise and fall with prime in real time.
Fixed rates don't move on prime
Fixed mortgages are tied to Government of Canada bond yields, not prime, and are locked for the term — a prime change doesn't touch a fixed payment until renewal.
A cut can be felt in weeks
On most variable mortgages a prime cut lowers your payment within a cycle or two; on a 'fixed-payment variable' the payment stays level and more goes to principal. We confirm which type you hold.
Timing fixed vs variable
Where prime sits in the cycle is central to the fixed-vs-variable decision. Pair this page with our rate forecast and we'll model both on your numbers.
Fixed or variable? We model both on your numbers
- We model fixed vs variable against your file, risk tolerance, and where prime sits in the cycle.
- 100+ lenders on one application — the sharpest variable discount and the best fixed, side by side.
- Maya tracks rate decisions and flags what a Bank of Canada move means for your payment.
- FSRA-licensed advice, no bureau pull to start, best-rate guarantee or $500.