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What is the prime rate in Canada?
The current prime rate in Canada is 4.45%, unchanged since October 30, 2025. The prime rate last dropped effective October 30, 2025 by 0.25% as the Bank of Canada reduced its policy rate by 25 basis points.
The prime rate is the interest rate that banks and lenders use to determine the interest rate for various loans such as variable-rate mortgages and home equity lines of credit. Changes in the prime rate move the rate on products priced off it, such as variable-rate mortgages and lines of credit. If you choose a variable-rate loan, the prime rate plus a percentage is generally used to calculate your debt payments.
Prime rate changes since 2020
The prime rate in Canada has seen some substantial changes since the start of 2020. The prime rate was 3.95% at the beginning of 2020 before experiencing three rate cuts of 0.50% to end the year 1.50% lower at a prime rate of 2.45%. The prime rate cut on March 30, 2020 which pushed the prime rate to 2.45% would mark the lowest point the prime rate has seen since 2020.
The Canada prime rate stayed at 2.45% from March 30, 2020 up until March 3, 2022 almost two years later where the prime rate increased by 0.25% to 2.70. The prime rate continued to increase over the period of March 3, 2022 up until July 13, 2023 where the prime rate reached 7.20%.
The next prime rate change would happen in 2024 where the prime rate would experience a cut of 0.25% pushing the rate to 6.95%. The prime rate experienced a total of five cuts in 2024 where it ended the year at 5.45%. The prime rate then experienced another rate cut of 0.25% in 2025 effective January 30, 2025. Three more cuts followed that year, on March 13, September 18 and October 30, and the prime rate now sits at 4.45%.
Prime rate changes in Canada since 2020
The peak prime rate was 7.20% from the period of July 13, 2023 to June 5, 2024. Since 2020 the lowest prime rate was 2.45% from March 30, 2020 up until March 3, 2022. The chart below breaks down all of the prime rate changes in Canada since March 2020.
| 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% | -0.50% |
| October 24, 2024 | 5.95% | -0.50% |
| 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% | +0.50% |
| October 27, 2022 | 5.95% | +0.50% |
| September 8, 2022 | 5.45% | +0.75% |
| July 14, 2022 | 4.70% | +1.00% |
| June 2, 2022 | 3.70% | +0.50% |
| April 14, 2022 | 3.20% | +0.50% |
| March 3, 2022 | 2.70% | +0.25% |
| March 30, 2020 | 2.45% | -0.50% |
| March 17, 2020 | 2.95% | -0.50% |
| March 5, 2020 | 3.45% | -0.50% |
This rate is impacted when the Bank of Canada raises or lowers the overnight rate.
The historical high for the prime rate is 22.75% in 1981. The historical low for the prime rate in Canada was 2.25% in 2009.
Prime rate at the big 5 banks
These are the current prime rates for the big five banks in Canada:
| Bank | Prime Rate |
|---|---|
| RBC | 4.45% |
| CIBC | 4.45% |
| TD | 4.45% |
| Scotiabank | 4.45% |
| BMO | 4.45% |
Understanding the Prime Rate and Overnight Rate in Canada
The prime rate is set by financial institutions and used as a benchmark for various loans and credit products. This means that changes in the prime rate affect variable-rate loans, lines of credit and variable-rate mortgages.
Where does the overnight rate come into play? The overnight rate also known as the policy interest rate is set by the Bank of Canada which then influences the prime rate that financial institutions set. Each financial institution sets its prime rate as a function of its cost of funding, which the policy rate influences, and the prime rate typically sits above the policy interest rate.
The policy interest rate, also known as the overnight rate is set by the central bank which is the Bank of Canada which then influences the prime rate commercial banks use as a base for lending. Financial institutions set their own prime rate. However, since the prime rate is influenced by the Bank of Canada’s overnight rate these rates are often the same across the five major banks in Canada.
Bank of Canada policy interest rate changes
The Bank of Canada has eight fixed annual announcements on policy interest rate decisions which can directly impact the prime rate. At these announcements the Bank states whether the policy interest rate is going up, going down or staying the same. These are the scheduled dates in 2026 for interest rate announcements:
- Wednesday, January 28
- Wednesday, March 18
- Wednesday, April 29
- Wednesday, June 10
- Wednesday, July 15
- Wednesday, September 2
- Wednesday, October 28
- Wednesday, December 9
Sources
- Bank of Canada. “Interest Rates and Monetary Policy.” bankofcanada.ca/rates
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