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What the Prime Rate Change Means For You.

Canada’s banks just lowered rates — here’s what that means in simple terms.

What is the Prime Rate?


The prime rate is a number that big banks use to decide how much interest they charge when people borrow money. Think of it like the base price of borrowing.

  • When the prime rate goes up, borrowing gets more expensive.
  • When it goes down, borrowing gets cheaper.


What Just Happened This Week


On Wednesday, October 29, 2025, the Bank of Canada lowered its key overnight rate by 0.25% (one-quarter of a percent). Because of that, Canada’s big banks also lowered their prime rates — from 4.70% down to 4.45%. That means borrowing money just got a little bit cheaper for many Canadians.


Why This Matters


If you have a loan or line of credit that changes with the prime rate — like a variable-rate mortgage or home equity line of credit (HELOC) — you’ll likely pay less interest now. For example, if you owe $100,000, a small drop in your interest rate could mean your monthly payment goes down or more of your payment goes toward paying off your loan instead of interest.


If you’re planning to borrow soon, this lower prime rate could make your new loan slightly more affordable. Use our mortgage payment calculator to determine what your new payment will be.


Why the Bank of Canada Lowered the Rate


The Bank of Canada made this change because:

  • The economy is slowing down a bit.
  • Inflation (how much prices rise) is closer to their target.


By lowering the rate, the Bank is trying to help people and businesses spend and borrow more easily — which supports jobs and growth.


What You Should Keep in Mind

  • This change mostly helps people with variable-rate loans.
  • If you have a fixed-rate mortgage, your payments stay the same for now.
  • Even though rates are lower, remember: you still have to repay what you borrow. Lower interest doesn’t mean free money.


Bottom Line


Because of Wednesday’s change, borrowing just got a little cheaper. If you already have a variable-rate loan, you might see some savings soon. If you’re thinking about getting a mortgage or refinancing, this could be a great time to review your options. Book a call to review your finances.


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