Today’s Mortgage Rates updated as of April 15, 2026 12:13 pm
5-year fixed*
5-year Variable*
*Insured mortgage rates only. Conditions apply. Rates are current as of today and subject to change without notice. Applicable to high-ratio purchase and renewal transactions with loan-to-value (LTV) ratios greater than 80.01% and up to 95%. Certain programs may also be available for insured files at 65% LTV and below, subject to insurer and lender guidelines on OAC.
Set by the Bank of Canada
Influences lenders’ prime rates
Affects variable mortgages and lines of credit
Changes can increase or decrease monthly payments
The Bank of Canada target overnight rate is one of the most important interest rates in Canada. It directly influences the prime rate, which in turn affects variable-rate mortgages, lines of credit, and other lending products.
At Citadel Mortgages, we help Canadians understand what the target overnight rate is, how it works, and why changes to this rate can impact your mortgage payments and borrowing costs.
Learn more by viewing the mortgage interest rate forecast of Canada as well.
The target overnight rate is the interest rate the Bank of Canada sets for overnight loans between major financial institutions.
While consumers do not borrow at this rate directly, it forms the foundation of Canada’s interest-rate system.
Banks and lenders use this rate as a benchmark when setting:
Prime rates
Variable mortgage rates
Lines of credit rates
When the Bank of Canada changes the target overnight rate, borrowing costs across Canada usually follow.
Learn more about how the Bank of Canada sets interest rates.
Learn more about today’s best mortgage rates in Canada.
The target overnight rate is set by the Bank of Canada, Canada’s central bank, which is responsible for:
Maintaining price stability
Controlling inflation
Supporting economic stability
The Bank of Canada adjusts this rate as part of its monetary policy to either slow down or stimulate the economy.
Official rate decisions are published by the Bank of Canada here.
When the Bank of Canada:
Raises the target overnight rate → lenders usually raise prime rates
Lowers the target overnight rate → lenders usually lower prime rates
This has a direct impact on:
Variable-rate mortgages
Adjustable-rate mortgages
Home equity lines of credit (HELOCs)
Fixed mortgage rates are not directly tied, but may still be influenced by broader market expectations.
These two rates are closely related but not the same.
Target Overnight Rate
Set by the Bank of Canada
Applies to overnight lending between institutions
Prime Rate
Set by individual lenders
Used for consumer loans and mortgages
Most Canadian lenders set their prime rate at approximately the target overnight rate plus a margin.
Today’s Mortgage Rates updated as of April 15, 2026 12:13 pm
If you have a variable mortgage or line of credit, changes to the target overnight rate can:
Increase or decrease your interest rate
Change your monthly payment amount, or
Alter your amortization period
Understanding this rate helps borrowers anticipate changes and plan ahead.
For general consumer guidance on mortgages, see the Financial Consumer Agency of Canada.
Citadel Mortgages Expert Insight:
Many borrowers focus on the headline rate but ignore how the target overnight rate drives prime. Understanding this relationship allows homeowners to make smarter decisions about fixed vs variable mortgages.
Understanding the relationship between the target overnight rate and borrowing costs can help Canadians make informed financial decisions.
Staying updated on the Bank of Canada’s target overnight rate helps homeowners and buyers:
The Bank of Canada schedules eight interest rate announcements annually, providing updates on monetary policy.
With the Bank of Canada targeting inflation control, many Canadians face the dilemma of choosing between fixed and variable mortgage rates.
| Feature | Fixed Rate | Variable Rate |
|---|---|---|
| Payment Stability | Consistent payments for the term | Payments fluctuate with the prime rate |
| Interest Costs | Slightly higher but predictable | Lower initially but may increase |
| Risk Tolerance | Ideal for risk-averse borrowers | Suitable for those comfortable with rate changes |
| Market Outlook | Best if rates are expected to rise | Best if rates are expected to fall |
It depends on economic conditions. If inflation stabilizes, the Bank of Canada may reduce the overnight rate, prompting banks to lower their prime rates.
The prime rate typically changes after the Bank of Canada announces its overnight rate adjustments, which occur eight times per year.
Fixed mortgages are indirectly influenced by the prime rate. Changes in the rate affect overall market conditions, which lenders use to set fixed rates.
A higher interest rate increases monthly payments, while lower rates reduce overall costs.
Fixed rates offer stability, while variable rates provide potential savings if market rates drop.
Yes, refinancing allows homeowners to take advantage of lower rates, depending on lender terms and fees.
Rate decisions are made several times per year based on economic conditions.
Simplify your financial planning with our full calculator suite:
Citadel Mortgages believes informed borrowers make better long-term decisions. We help clients:
Understand how interest rates actually work
Prepare for rate changes before they happen
Choose mortgage structures aligned with their risk tolerance
Education is a key part of protecting clients from surprises.
Changes to the Bank of Canada target overnight rate can have a meaningful impact on your mortgage. Citadel Mortgages helps you understand these changes and plan accordingly.
Explore your options here.