Benchmarks
What is the prime rate in Canada, and how does it affect my mortgage?
Written by Stonefield Mortgage · Reviewed by David Steinfeld, principal broker · Stonefield Mortgage, FSRA mortgage brokerage licence #13722 · [review pending — before this page is indexed]
Published · Updated
In Canada, the prime rate is the base rate a bank sets for its variable-rate lending. Variable-rate mortgages and home equity lines of credit (HELOCs) generally move with the lender's prime. Prime generally changes after a Bank of Canada policy-rate decision, so a decision day is when a variable payment or a HELOC rate can change.
What the prime rate is
Each lender sets its own prime rate. The Bank of Canada publishes the chartered banks' prime business rate as series V80691311, updated weekly, which gives a public record of where prime has been.
Posted rates published by the Bank of Canada, not a quote: series V80691311 was 4.45% in the week of October 21, 2026 (source: Bank of Canada Valet, fetched October 2026). Prime is not your mortgage rate; prime is the starting point many lenders price variable products from.
Source: Bank of Canada, series V80691311 (first weekly value of each month; last observation 2026-10-28). Posted rates published by the Bank of Canada, not a quote; most borrowers are offered a lower, discounted rate.
How prime affects a variable mortgage
A variable rate is generally set as the lender's prime plus or minus a fixed spread for the whole term. When prime moves, your rate moves by the same amount, and the spread stays as signed.
Whether your payment changes when prime moves depends on the kind of variable mortgage. With an adjustable payment, the payment itself generally changes when prime does. With a fixed payment, the payment generally stays the same and more or less of the payment goes to interest.
On a fixed-payment variable mortgage, if rates rise far enough, the payment can stop covering the interest, which is the trigger rate. Your contract says which kind of variable mortgage you have.
Illustrative, not a quote: if prime rises by 0.25 percentage points on a $400,000 variable balance, interest goes up by about $1,000 a year ($400,000 × 0.25 ÷ 100), roughly $83 a month at first. A fall of the same size saves about the same. The payment shock tool shows what a rate change would mean for your payment.
How prime affects a HELOC
HELOC rates are usually variable and generally priced from the lender's prime. Many HELOCs let you pay interest only, so a change in prime shows up in your payment straight away.
Illustrative, not a quote: on a $100,000 HELOC balance, a 0.25-point rise in prime adds about $250 of interest a year ($100,000 × 0.25 ÷ 100), about $21 a month.
Apart from prime, a HELOC is generally a demand loan, so the lender can review or reduce the limit.
When prime moves
Prime generally moves after a Bank of Canada decision on its policy interest rate, which comes on eight fixed dates a year (source: Bank of Canada, checked October 2026). When the policy rate changes, banks have generally changed prime by the same amount within a day or so. When the policy rate holds, prime generally holds too.
The policy-rate decision dates, and what each decision means for a renewal, are on our Bank of Canada decisions page.
Why fixed rates do not move with prime
Fixed rates do not move with prime. Lenders generally set fixed rates from their own funding costs, which tend to track bond yields more closely than the policy rate. So a cut in prime lowers variable payments, but fixed-rate offers can stay the same, or move the other way, in the same week.
If you are choosing between fixed and variable at renewal, the fixed vs variable tool compares the two side by side; results are estimates only, not an offer or advice.
Sources
- Bank of Canada — Valet API, series V80691311 (Prime rate), fetched 2026-10-24.
- Bank of Canada — Policy interest rate, checked 2026-10-26.
- Financial Consumer Agency of Canada — Borrowing against home equity, checked 2026-10-23.
What to do next
If you have a variable-rate offer or a renewal coming, enter the offer in the offer check, then send us the numbers. A licensed broker compares your offer with what the lenders we work with are offering this week, for both fixed and variable, and replies within one business day.
Common follow-up questions
Is prime the same as the Bank of Canada's rate?
No. The Bank of Canada sets the policy interest rate; each lender sets its own prime. Prime generally sits above the policy rate and generally moves with the policy rate.
Does prime change my payment on a fixed-rate mortgage?
No, not during the term. A fixed rate and payment stay the same until the term ends. At renewal, the new rate reflects the market then, not prime.
Is a variable rate a good idea right now?
Whether a variable rate suits you depends on how much payment movement your budget can take and how long you plan to keep the mortgage. We cannot tell you where rates will go, and no one can promise a direction. Many borrowers compare fixed and variable on the same day before deciding.
This page is general information for Ontario readers, not financial, legal or tax advice. Public rules on this page were checked on 2026-10-26; your mortgage contract governs. Every mortgage is subject to lender approval.