All of Canada’s Big Six banks and many other lenders have lowered their prime rate to 4.45%, following the Bank of Canada’s latest quarter-point rate cut. TD’s separate mortgage prime also fell by 25 basis points but remains slightly higher at 4.60%, a distinction that dates back to a 2016 pricing adjustment.
The last time prime sat at this level was June 2022, just before the Bank of Canada began its rapid tightening campaign that sent borrowing costs to a 22-year high. Since then, the banks’ prime rate has dropped by a cumulative 255 basis points, reflecting one of the fastest easing cycles in recent memory.
What it means for mortgage borrowers
For those with adjustable-rate mortgages, the latest reduction translates into immediate savings of about $14 less per month for every $100,000 in mortgage debt based on a 25-year amortization. Borrowers with fixed-payment variable mortgages will see more of their payments go toward principal, even if their monthly payment doesn’t change.
The cut also provides relief for those with home equity lines of credit (HELOCs) and personal lines of credit, both of which are directly tied to prime. Their interest costs will decline immediately once lenders adjust their rates.
Across the Big Six banks, roughly one-third of outstanding mortgages are variable-rate, a share that’s down from pandemic highs but still significant.
Most of these are fixed-payment variable mortgages, offered by lenders such as TD, RBC and CIBC, where payments remain static as interest rates fluctuate. By contrast, BMO and Scotiabank offer true adjustable-rate mortgages, meaning payments rise or fall immediately with changes in prime.
While fixed-rate mortgages aren’t directly affected by changes in prime, they’re priced off Government of Canada bond yields, which have generally trended lower this year. However, the five-year yield climbed to 2.68% today, up 11 basis points, after the Bank of Canada said its policy rate is now at “about the right level” to keep inflation near target, tempering market expectations for any further rate cuts.
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Last modified: October 29, 2025