Understanding Interest Rates in Canada
Interest rates in Canada flow from a single source: the Bank of Canada (BoC) overnight rate. Every time the BoC changes its policy rate, the effects ripple through mortgages, savings accounts, lines of credit, and the Canadian dollar’s exchange rate.
This hub covers everything from the mechanics of how the BoC rate is set, to how rate changes affect your finances, to practical guides on inflation and currency conversion.
Bank of Canada Rate Guides
- Canada Interest Rate — Bank of Canada Rate 2026
- Bank of Canada Rate History
- Bank of Canada Rate Announcement Schedule 2026
- How BoC Rate Changes Affect Your Savings
- Canada Prime Rate
Rate Impact Guides
Inflation
Currency & Exchange Rates
How the Bank of Canada Rate Works
The BoC sets its overnight rate — the interest rate at which major Canadian banks lend money to each other for one-day periods — at eight scheduled meetings per year. This rate is the anchor for all other interest rates in Canada:
| Rate | Relationship to BoC Rate |
|---|---|
| Prime rate | BoC rate + 2.20% (by convention) |
| Variable mortgage rate | Prime rate ± lender spread |
| HELOC rate | Prime rate + 0.50% (typically) |
| HISA rate | Set by banks; moves loosely with BoC rate |
| GIC rates | Set by competitive market; tracks BoC rate broadly |
| Fixed mortgage rate | Tracks Government of Canada bond yields, not BoC rate directly |
When the BoC raises its rate, variable-rate borrowers pay more; savers earn more. When it cuts, the reverse happens.