The benchmark interest rate that Canadian banks use to set variable mortgage rates and lines of credit.
The prime rate is directly influenced by the Bank of Canada overnight rate. When the BoC raises or lowers the overnight rate, banks typically adjust their prime rate by the same amount within days. As of early 2026, the prime rate is approximately 4.95%. Variable mortgage rates are expressed relative to prime (e.g., prime - 0.50% = 4.45%). The prime rate also affects HELOCs and other variable-rate lending products.
Related terms: Variable Rate Mortgage | Bank of Canada Overnight Rate