Canadian Prime Rate: Live Rate & Bank of Canada Tracking
Canada’s Prime Rate is the benchmark each lender uses to set variable-rate mortgages, HELOCs, and unsecured lines of credit. It moves in lockstep with the Bank of Canada’s Policy Rate — typically set at 2.20 percentage points above the Policy Rate by the Big 5 banks. When the Bank of Canada changes rates, Prime almost always follows within 24 hours, and your variable rate adjusts on the next billing cycle.
How Prime Rate Works in Canada
The Canadian Prime Rate is set independently by each lender, but in practice the Big 5 banks (RBC, TD, Scotiabank, CIBC, BMO) move in lockstep. The convention since 1996 has been Prime = Bank of Canada Policy Rate + 2.20 percentage points. When the BoC adjusts its overnight rate, Canada’s Prime follows within 24 hours — sometimes within the same afternoon.
Your variable-rate mortgage, HELOC, or line of credit is expressed as “Prime minus X%” (a discount, e.g. Prime – 1.00%) or “Prime plus X%” (a premium). The discount or premium you negotiate at origination stays fixed for the full term — only the Prime component moves. This means a 25bp Bank of Canada cut flows directly to your rate, saving roughly $12 per month per $100,000 of mortgage balance.
Unlike variable rates, fixed-rate mortgages are not affected by Prime changes. Fixed rates are priced off Government of Canada bond yields (2-year, 3-year, 5-year, 10-year depending on term). See our 5-year fixed rates page for live bond-based pricing.
Prime Rate and Your Mortgage
If you have a variable-rate mortgage, the Prime rate directly determines your interest cost. For fixed-payment variable mortgages (common at the Big 5 banks), the payment stays flat but the principal/interest split shifts — when Prime rises enough, your full payment may be covering only interest. This is the “trigger rate” threshold.
For adjustable-rate mortgages (typically offered by monolines and credit unions), the payment adjusts with every Prime change, so you never hit a trigger — you just feel the full impact immediately.
HELOCs are always Prime-based and always adjust immediately. A Prime + 0.50% HELOC today costs 4.95%; if the Bank of Canada cuts 25bp, your HELOC rate drops to 4.70% on the next billing cycle.