Bank of Canada Policy Rate
The overnight target rate set by the Bank of Canada — the single most important interest rate in the Canadian economy.
The Bank of Canada Policy Rate (also called the overnight target rate) is the interest rate at which the Bank of Canada influences overnight lending between chartered banks. It's the foundational rate that determines Prime, variable mortgages, HELOCs, and shapes the entire fixed-rate yield curve through bond market expectations. The BoC holds 8 scheduled rate announcements per year, roughly every 6 weeks, at 9:45 AM Eastern. Each announcement is accompanied by a Monetary Policy Report and often a press conference. Every 25 basis point change flows through to variable-rate borrowers within one billing cycle.
Related Terms
The base interest rate each Canadian lender charges its most creditworthy customers, typically set about 2.00% above the Bank of Canada Policy Rate.
A mortgage where the interest rate is tied to Prime Rate and moves with every Bank of Canada Policy Rate decision.
The interest rate on 5-year Canadian government bonds — the benchmark that drives 5-year fixed mortgage pricing.