The current prime rate in Canada is 4.45%. This prime rate was made effective October 30, 2025 when the Bank of Canada made the decision to cut the policy rate to 2.25% (Bank of Canada Valet API, series V39079).
| Metric | Value |
|---|---|
| Current prime rate | 4.45% (effective October 30, 2025) |
| Bank of Canada overnight rate | 2.25% |
| Standard spread | +2.2% |
Prime rate = Bank of Canada overnight rate + the industry-standard 2.2% spread. Overnight rate: Bank of Canada Valet API, series V39079, fetched 2026-09-02, as of September 1, 2026. Prime rate itself is set independently by each bank, not published by the BoC – this is the standard convention used across major Canadian banks, not an official published figure.
Prime rate change history
The prime rate has changed quite a bit over the past years. Here is a breakdown of all the historical prime rate changes made by the Bank of Canada.
| Effective Date | Prime Rate | Change |
|---|---|---|
| October 30, 2025 | 4.45% | -0.25% |
| September 18, 2025 | 4.70% | -0.25% |
| March 13, 2025 | 4.95% | -0.25% |
| January 30, 2025 | 5.20% | -0.25% |
| December 12, 2024 | 5.45% | -0.5% |
| October 24, 2024 | 5.95% | -0.5% |
| September 5, 2024 | 6.45% | -0.25% |
| July 25, 2024 | 6.70% | -0.25% |
| June 6, 2024 | 6.95% | -0.25% |
| July 13, 2023 | 7.20% | +0.25% |
| June 8, 2023 | 6.95% | +0.25% |
| January 26, 2023 | 6.70% | +0.25% |
| December 8, 2022 | 6.45% | +0.5% |
| October 27, 2022 | 5.95% | +0.5% |
| September 8, 2022 | 5.45% | +0.75% |
| July 14, 2022 | 4.70% | +1% |
| June 2, 2022 | 3.70% | +0.5% |
| April 14, 2022 | 3.20% | +0.5% |
| March 3, 2022 | 2.70% | +0.25% |
| March 27, 2020 | 2.45% | -0.5% |
| March 16, 2020 | 2.95% | -0.5% |
| March 4, 2020 | 3.45% | -0.5% |
| October 24, 2018 | 3.95% | +0.25% |
| July 11, 2018 | 3.70% | +0.25% |
| January 17, 2018 | 3.45% | +0.25% |
| September 6, 2017 | 3.20% | +0.25% |
| July 12, 2017 | 2.95% | +0.25% |
| July 15, 2015 | 2.70% | -0.25% |
| January 21, 2015 | 2.95% | -0.25% |
| September 8, 2010 | 3.20% | +0.25% |
| July 20, 2010 | 2.95% | +0.25% |
| June 1, 2010 | 2.70% | +0.25% |
| April 21, 2009 | 2.45% | — |
Prime rate = Bank of Canada overnight rate + the industry-standard 2.2% spread, applied to each historical rate change. Overnight rate history: Bank of Canada Valet API, series V39079, fetched 2026-09-02.
The prime rate in Canada is known to be the prime lending rate, which is the rate used by banks and financial institutions to set the interest rates on their financial products. The prime rate is used in the interest calculation for variable loans and lines of credit. The prime rate is important for determining affordability in Canada. It directly impacts mortgage payments on variable-rate mortgages, GIC returns, and interest rates on loans and savings products.
How the prime rate is set
The prime rate is not set by the government. Instead, each bank sets its own prime rate, though in practice all major Canadian banks use the same prime rate.
The prime rate is closely linked to the Bank of Canada’s overnight rate (also called the policy interest rate). The relationship is simple:
Prime Rate = Bank of Canada Overnight Rate + Spread (typically 2.20%)
When the Bank of Canada raises or lowers the overnight rate, commercial banks adjust their prime rate by the same amount, usually within one to two business days of the announcement. The 2.20% spread has been standard since 2015, though it is not fixed by regulation and can technically vary.
For example, with the current overnight rate at 2.25%, the prime rate is 2.25% + 2.20% = 4.45%.
What financial products are affected by the prime rate?
The prime rate directly influences the cost of several common financial products in Canada:
Variable-rate mortgages
If you have a variable-rate mortgage, your rate is expressed as prime plus or minus a discount. For example, a rate of prime − 0.50% means your effective rate is 4.45% − 0.50% = 3.95%. When the prime rate changes, your payment or interest allocation adjusts accordingly. Use our mortgage calculator to model different rate scenarios.
Home equity lines of credit (HELOCs)
HELOC rates are typically set at prime plus a margin, such as prime + 0.50%. This means the interest rate on your HELOC moves directly with the prime rate.
Personal lines of credit
Unsecured lines of credit are also priced off the prime rate, usually at prime + 2% to prime + 5% depending on your creditworthiness. See our line of credit calculator to estimate payments.
Variable-rate personal and car loans
Some personal loans and auto loans use variable rates tied to prime. When prime rises, your borrowing cost increases.
Savings accounts and GICs
While not directly tied to prime, savings account rates and GIC rates tend to follow the same direction as the prime rate. When the Bank of Canada cuts rates, savings yields typically drop as well.
How a prime rate change affects your mortgage payment
To illustrate the real impact, here is an example of how a 0.25% prime rate change affects a variable-rate mortgage:
Assumptions: $500,000 mortgage balance, 25-year amortization, variable rate of prime − 0.50%.
| Prime Rate | Effective Rate | Monthly Payment | Payment Change |
|---|---|---|---|
| 4.45% | 3.95% | $2,624 | — |
| 4.70% | 4.20% | $2,698 | +$74/month |
| 4.95% | 4.45% | $2,772 | +$148/month |
| 4.20% | 3.70% | $2,551 | −$73/month |
| 3.95% | 3.45% | $2,478 | −$146/month |
A single 0.25% rate increase adds approximately $74 per month or $888 per year on a $500,000 mortgage. Over the rate-hiking cycle from 2022 to 2023, the prime rate rose from 2.70% to 7.20%, which would have added over $1,300 per month to this same mortgage. Use our mortgage calculator to see the impact on your specific mortgage.
Prime rate vs. fixed mortgage rates
The prime rate and fixed mortgage rates are determined by different factors:
| Factor | Prime Rate / Variable Mortgages | Fixed Mortgage Rates |
|---|---|---|
| Set by | Commercial banks (follows Bank of Canada) | Bond market (Government of Canada bond yields) |
| Changes | Eight times per year (on BoC announcement dates) | Daily, based on bond market movements |
| Predictability | Moves in known increments (0.25% or 0.50%) | Can fluctuate gradually |
| Typical advantage | Lower cost over time historically | Payment certainty for the full term |
Historically, variable rates have been less expensive than fixed rates over the long run, but the 2022–2023 rate-hiking cycle was a notable exception where variable-rate borrowers saw significant payment increases. The best choice depends on your risk tolerance and the current rate environment. Compare options with our mortgage stress test calculator.
Bank prime rates
Here are the current prime rates for the major banks in Canada:
- TD current prime rate of 4.45%
- RBC current prime rate of 4.45%
- CIBC current prime rate of 4.45%
- BMO current prime rate of 4.45%
- ScotiaBank current prime rate of 4.45%
- National Bank current prime rate of 4.45%
Prime rate vs. policy interest rate
This graph shows the relationship between the policy interest rate and the prime rate set by the Bank of Canada. As you can see there is a spread between the two rates with the prime rate increasing or decreasing as the policy interest rate increases or decreases.
Policy interest rate change history
These are the historical rates for the policy interest rate in Canada which has a direct impact on the prime rate. As the policy interest rate which is also known as the target for the overnight rate changes, so does the prime rate in Canada.
| Date | Decision | Policy Rate | Change |
|---|---|---|---|
| April 21, 2009 | Data begins | 0.25% | — |
| June 1, 2010 | Hike | 0.5% | +0.25% |
| July 20, 2010 | Hike | 0.75% | +0.25% |
| September 8, 2010 | Hike | 1% | +0.25% |
| January 21, 2015 | Cut | 0.75% | -0.25% |
| July 15, 2015 | Cut | 0.5% | -0.25% |
| July 12, 2017 | Hike | 0.75% | +0.25% |
| September 6, 2017 | Hike | 1% | +0.25% |
| January 17, 2018 | Hike | 1.25% | +0.25% |
| July 11, 2018 | Hike | 1.5% | +0.25% |
| October 24, 2018 | Hike | 1.75% | +0.25% |
| March 4, 2020 | Cut | 1.25% | -0.5% |
| March 16, 2020 | Cut | 0.75% | -0.5% |
| March 27, 2020 | Cut | 0.25% | -0.5% |
| March 3, 2022 | Hike | 0.5% | +0.25% |
| April 14, 2022 | Hike | 1% | +0.5% |
| June 2, 2022 | Hike | 1.5% | +0.5% |
| July 14, 2022 | Hike | 2.5% | +1% |
| September 8, 2022 | Hike | 3.25% | +0.75% |
| October 27, 2022 | Hike | 3.75% | +0.5% |
| December 8, 2022 | Hike | 4.25% | +0.5% |
| January 26, 2023 | Hike | 4.5% | +0.25% |
| June 8, 2023 | Hike | 4.75% | +0.25% |
| July 13, 2023 | Hike | 5% | +0.25% |
| June 6, 2024 | Cut | 4.75% | -0.25% |
| July 25, 2024 | Cut | 4.5% | -0.25% |
| September 5, 2024 | Cut | 4.25% | -0.25% |
| October 24, 2024 | Cut | 3.75% | -0.5% |
| December 12, 2024 | Cut | 3.25% | -0.5% |
| January 30, 2025 | Cut | 3% | -0.25% |
| March 13, 2025 | Cut | 2.75% | -0.25% |
| September 18, 2025 | Cut | 2.5% | -0.25% |
| October 30, 2025 | Cut | 2.25% | -0.25% |
Source: Bank of Canada Valet API, series V39079 (“Target for the overnight rate”), fetched 2026-09-02. Valet API serves V39079 only from 2009-04-21 onward; earlier history is not pipeline-sourced.
Changes to the interest rate are scheduled to change or stay the same on eight specific dates for the 2026 fiscal year. These dates are as follows:
- January 28th
- March 18th
- April 29th
- June 10th
- July 15th
- September 2nd
- October 28th
- December 9th
Changes to the interest rate are scheduled to change or stay the same on eight specific dates for the 2026 fiscal year. These dates are as follows:
- January 29th
- March 12th
- April 16th
- June 4th
- July 30th
- September 17th
- October 29th
- December 10th
Prime rate forecast
Predicting future prime rate movements depends on the Bank of Canada’s monetary policy decisions, which are driven by inflation, employment, GDP growth, and global economic conditions. After an aggressive rate-cutting cycle in 2024 and 2025 that brought the overnight rate from 5.00% down to 2.25%, the Bank has held steady through 2026 while it assesses the economic impact of energy-price shocks and US tariffs.
Key factors to watch include:
- Inflation trends — If inflation remains near the 2% target, the Bank may hold steady or cut further. Persistent inflation above target could lead to rate increases.
- Employment data — Rising unemployment could prompt additional rate cuts to stimulate the economy.
- Housing market activity — The Bank monitors housing as both an economic indicator and a financial stability concern.
- Global trade and tariffs — Trade policy uncertainty, particularly with the United States, can influence the Bank’s rate decisions.
Related calculators
- Mortgage Calculator — Calculate your monthly mortgage payments at current rates
- HELOC Calculator — Estimate your home equity line of credit payments
- Line of Credit Calculator — Calculate interest costs on your line of credit
- Mortgage Affordability Calculator — See how much home you can afford at current rates
- Mortgage Stress Test Calculator — Check if you qualify under the stress test
- Interest Rate — View the current Bank of Canada policy rate and history- Banking Basics Hub: Accounts, Transfers & Banking in Canada