Prime rate in Canada —
current + historical.
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.
What prime means for
your mortgage.
Prime is a benchmark, not your rate — but it drives every variable product in Canada.
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.
One number drives it all
Banks set prime, but in lock-step with the Bank of Canada's overnight policy rate — always prime = overnight + 2.20%. Eight decisions a year is what actually moves your payment.
HELOCs ride prime in real time
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 immediately.
Fixed rates are unaffected mid-term
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.
Bank of Canada
rate history
2020–2026.
Overnight policy rate and the resulting prime through the pandemic cuts, the 2022–23 hiking cycle, and the easing 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% |
| Oct 2025 | 2.25% | 4.45% |
| Sep 2026 | 2.25% | 4.45% |
What prime means
for your situation.
Tap any scenario to see how we approach it.
If you’re…You have a variable mortgage and prime just moved
You have a variable mortgage and prime just moved
We'll confirm whether your product adjusts the payment or the principal split, then model the impact on your amortization — so you know exactly where you stand.
Review my mortgageIf you’re…You're choosing between fixed and variable
You're choosing between fixed and variable
Where prime sits in the cycle is central to that decision. We model both paths against your file, risk tolerance, and rate outlook — side by side, no pressure.
Read the rate forecastIf you’re…You carry a HELOC balance
You carry a HELOC balance
Your HELOC rate moves with every Bank of Canada decision. We calculate the impact on your interest-only payment and compare HELOC vs. refinance if you want to consolidate.
Learn about HELOCsIf you’re…Your mortgage comes up for renewal soon
Your mortgage comes up for renewal soon
Timing your renewal around the rate cycle can make a meaningful difference. We compare fixed, variable, and hybrid options across 100+ lenders for your renewal date.
Plan my renewalIf you’re…You're on a fixed-payment variable and unsure what changed
You're on a fixed-payment variable and unsure what changed
On a fixed-payment variable, a prime cut doesn't change your payment — more goes to principal instead. We explain exactly how your product works and what it means for your amortization.
Talk to an advisorIf you’re…You want to know where prime is headed next
You want to know where prime is headed next
We track every Bank of Canada decision and publish a plain-language forecast after each one. Read where we think rates go from here before you lock in.
See the rate forecastWhat a 0.25% move
does to your payment.
A $500,000 variable at prime − 0.90%, over 25 years. A 0.25% cut vs. rate held.
- Mortgage balance$500,000
- Variable rateprime − 0.90% = 3.55%
- Amortization25 years
- Monthly payment~$2,510
- Mortgage balance$500,000
- New variable rate3.30%
- Amortization25 years
- Monthly payment~$2,444
Illustrative only — your rate, balance, and amortization will differ. We model the exact numbers for your file. Try the payment calculator.
Common questions,
clear answers.
How prime is set, what it has done, and what it means for your payment — answered plainly.
What is the prime rate in Canada today?
The benchmark prime rate used by Canada's major banks is currently 4.45% (as of Sep 2, 2026), which corresponds to a Bank of Canada overnight policy rate of about 2.25%. The big banks currently share the same prime; some other lenders set their own prime rate, so check your agreement.
Who sets the prime rate, and how often does it change?
Banks set their own prime, but it moves in lock-step with the Bank of Canada's overnight policy rate — typically prime = overnight + 2.20%. The Bank announces rate decisions on eight fixed dates a year; when it hikes or cuts, prime follows within days.
What has the prime rate done historically?
After emergency COVID-19 cuts took the overnight rate to 0.25% (prime 2.45%) in 2020, the Bank hiked through 2022–2023 to a 5.00% overnight peak (prime 7.20%), the highest since 2001, before cutting from mid-2024 to 2.25% (prime 4.45%) on October 29, 2025. It has held there since, most recently at the September 2, 2026 decision. The next scheduled decision is December 9, 2026. The table above shows the full path.
How does a 0.25% prime change affect my payment?
On a $500,000 variable mortgage at roughly prime − 0.90%, a 0.25% cut lowers the monthly payment by about $66; a hike raises it by the same. The exact effect depends on your balance, discount, and amortization — model yours in the payment calculator.
If prime drops, does my payment drop?
On most variable mortgages, yes — though some 'fixed-payment variable' products keep the payment level and change how much goes to principal. We confirm which type you have and model both.
Prime vs. mortgage rate — what's the difference?
Prime is the bank benchmark for variable products. Your actual variable rate is prime minus a discount; a fixed rate is a separate number tied to bond yields. See today's best mortgage rates and our rate forecast.
Best mortgage rates by city
Prime drives variable rates coast to coast — compare today's best rates with a local advisor in your market.
We’ll try to beat your rate.
If we can’t, we pay you $500.¹
¹ Rate Beat: eligible Big-6 bank written offers only · same product, term & amount · $500 paid to you or your nominated charity at closing · conditions apply