Today’s Mortgage Rates updated as of December 21, 2024 3:30 pm
5-year fixed*
5-year Variable*
*Insured loans. Other conditions apply. Rate in effect as of today.
The prime rate plays a crucial role in shaping Canada’s borrowing landscape. Whether you’re a first-time homebuyer, a seasoned homeowner, or considering a home equity line of credit, or private mortgage understanding the prime rate’s dynamics can save you thousands of dollars and guide you to better financial decisions.
At Citadel Mortgages, we are committed to equipping you with the knowledge and tools you need to navigate the complexities of mortgages and loans in Canada. This comprehensive guide will walk you through what the prime rate is, how it impacts mortgages, historical trends, and much more.
Learn more by viewing the mortgage interest rate forecast of Canada as well.
The prime rate is the interest rate that Canadian banks charge their most creditworthy customers. It is the foundation for setting rates on variable-rate mortgages, personal loans, and lines of credit. The prime rate is closely linked to the Bank of Canada’s overnight rate, which influences the lending and borrowing rates across financial institutions.
When the Bank of Canada raises or lowers its overnight rate, major banks typically adjust their prime rates accordingly, affecting millions of Canadian borrowers.
Learn more about how the Bank of Canada sets interest rates.
Lean more about today’s best mortgage rates in Canada.
The Bank of Canada adjusts the overnight rate to control inflation, manage employment levels, and maintain economic stability. Key factors influencing this decision include:
When the Bank of Canada changes the overnight rate, banks typically follow suit, adjusting their prime rates accordingly.
Read about how fixed and variable rates compare on the Government of Canada website.
Understanding the data behind Canada’s mortgage market can help buyers and refinancers make better decisions. Below are key statistics related to mortgage activity in Canada.
Refinancing Activity:
Mortgage Terms:
Average Interest Rates:
Understanding historical trends can provide insight into how the prime rate behaves during different economic conditions.
| Year | Prime Rate (%) | Economic Context |
|---|---|---|
| Early 1980s | >20.00% | Combating high inflation and stagflation. |
| 1990s | 6.00%–8.00% | Stabilization after economic reforms. |
| 2008–2010 | ~2.25% | Global financial crisis recovery. |
| 2020 | ~2.45% | Pandemic-driven economic measures. |
| 2024 | 5.95% | Inflation control amidst a cooling economy. |
Source: Bank of Canada Historical Rates
Using a mortgage broker that has access to some of the lowest mortgage rates in Canada, is key to ensure you have the best approval rate.
While 33% of non-homeowners believe they’ll never own*, our Citadel mortgage brokers are 100% confident they can make it happen. How? With our expert advice and guidance.
(5-years interest savings with Citadel Mortgages)**
(Interest savings with Citadel Mortgages)
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The prime rate significantly influences borrowing costs, especially for variable-rate mortgages and lines of credit.
Variable-rate mortgages are directly tied to the prime rate. A reduction in the prime rate leads to lower monthly payments, while an increase results in higher costs.
Fixed-rate mortgages are indirectly affected by the prime rate. Changes in the prime rate influence broader market conditions, which in turn affect fixed rates.
HELOCs and personal lines of credit are also tied to the prime rate. Any changes in the rate are immediately reflected in the cost of borrowing.
At Citadel Mortgages, we recognize how important it is to stay informed about changing mortgage interest rates. Whether you’re purchasing your first home, refinancing, or renewing your mortgage, we’re here to guide you through the process with solutions that suit your financial needs, even in fluctuating rate environments.
From fixed to variable rates, we offer tailored solutions that help you secure the most competitive interest rates for your situation.
Our team monitors the Canadian mortgage market to provide insights on current rates, helping you make informed decisions.
We focus on finding solutions, even if you’ve faced credit challenges or financial setbacks.
Income constraints shouldn’t hold you back. We specialize in making homeownership accessible for Canadians in various financial situations.
Enjoy a smooth experience with quick approvals and clear communication every step of the way.
Secure today’s interest rates to avoid surprises if rates increase before your mortgage closes.
Consolidate high-interest debt into a single, lower-interest mortgage payment, saving you money and simplifying your finances.
Choose flexible payment terms that fit your budget, whether you prefer the stability of a fixed rate or the potential savings of a variable rate.
Refinance your mortgage to tap into your home’s equity for renovations, debt consolidation, or investment opportunities.
Mortgage trends offer a snapshot of the current financial landscape:
Getting approved for a mortgage requires a strategic approach, especially during periods of rising rates.
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.
Use our mortgage calculator to gain a clearer picture of what you can expect in terms of monthly payments, interest costs, and amortization schedules. Simply input your loan amount, interest rate, and amortization period to get started. This tool provides estimates to help you make informed decisions as you explore different mortgage options.
Understanding Canada’s prime rate and its impact on borrowing is essential for making sound financial decisions. Whether you’re considering a mortgage, refinancing, or a HELOC, Citadel Mortgages is here to help you every step of the way. Our expert team ensures you get the best possible rates and a tailored mortgage solution.
At Citadel Mortgages, we pride ourselves on offering expert, client-focused mortgage solutions that stand out in the industry. Here’s why you should choose us:
Our mortgage brokers are licensed and certified across multiple provinces, providing exceptional advice and service tailored to your unique needs. Our mortgage brokers are committed to delivering the highest standards of professionalism and expertise.
Unlike traditional commission-based models, our mortgage agents are evaluated based on client satisfaction and the quality of their advice. This ensures that you receive impartial guidance on the best mortgage options for your situation.
Citadel Mortgages offers competitive rates that help you save money over the life of your mortgage. Our team works diligently to find the most favorable terms to suit your financial goals.
We are dedicated to transforming the mortgage industry by offering a transparent, seamless process. Our 100% digital platform ensures that you can manage your mortgage application from start to finish with ease and confidence.
At Citadel Mortgages, our mission is to provide a positive, empowering, and transparent property financing experience. We simplify the mortgage process to make it as straightforward and stress-free as possible.
For personalized advice and the best mortgage rates in Toronto, contact our licensed and knowledgeable mortgage experts at Citadel Mortgages.
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Disclaimer
Citadel Mortgages operates an information-based website designed to display mortgage rates from its trusted partners. While we strive to present accurate and up-to-date information, we cannot guarantee the precision of the rates or other details provided at all times. Citadel Mortgages assumes no liability for errors, inaccuracies, or damages resulting from the use of the information on this site. Terms and conditions apply, and it is essential to consult directly with a licensed mortgage broker for personalized advice and accurate details about specific products and services. Please note that the rates displayed are for informational purposes only and may differ from actual rates offered.
Citadel Mortgages is licensed to operate in the following jurisdictions:
Instant Approval, Conditional Approval, Pre-Approval
All approvals are subject to credit and underwriting approval. Not all borrowers will qualify for conventional or equity financing. The receipt of an application does not constitute a financing approval or guarantee of an interest rate. Restrictions apply. The Annual Percentage Rate (APR) is subject to underwriting and approval, and fees and terms may vary. Contact us for the most current rates and further information about specific products. OAC (On Approved Credit).
We remain committed to delivering outstanding service, transparency, and ethical practices. Please note that some rates are province-specific and may change without notice. Rates may not be available in Quebec; please contact us directly to confirm availability and approval.
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