Prime Rate in Canada

The prime rate in Canada directly influences variable mortgage rates, affecting monthly payments and interest costs. When the Bank of Canada changes its overnight rate, lenders adjust the prime rate accordingly, impacting variable-rate mortgages. Fixed-payment variable mortgages keep payments stable but increase interest portions when rates rise. The Bank of Canada recently held its rate at 2.25%, keeping the prime rate at 4.45%, so variable-rate borrowers see no immediate change. Fixed rates respond more to bond yields than the overnight rate.