Scotiabank Prime Rate
The prime rate is the lending rate Canada’s banks and financial institutions use to set interest rates for variable loans and lines of credit, including mortgages. Scotiabank’s prime rate is currently 3.95%.
About Scotiabank’s prime rate
The current Scotiabank prime rate is 3.95%. This is the same prime rate that’s posted by most major financial institutions in Canada.
As with other banks, Scotiabank usually only changes its prime rate in response to Bank of Canada (BoC) interest rate policy. When the BoC raises or lowers the key rate (known as the target for the overnight rate), Scotiabank will usually adjust its prime rate by the same amount. For example, if the BoC were to raise the overnight rate by 25 basis points (bps), Scotiabank would usually raise its prime rate by 25 bps as well.
There have been some exceptions to this rule. When the BoC cut interest rates by 25 bps, Scotiabank only lowered their prime rate by 15 bps, as did Canada’s other major banks. And while it’s unusual for any bank to change its prime rate independent of BoC interest rate announcements, changes to the prime rate can happen at any time.
How does the Scotiabank prime rate affect mortgage rates
When you get a variable mortgage from Scotiabank, the interest rate will be expressed as the Scotiabank prime rate, plus or minus a certain percentage point. For example, if the Scotiabank prime rate is 3.00%, and your mortgage rate is prime minus 0.50%, your mortgage rate would be 2.50%.
If Scotiabank were to change its prime rate, your mortgage rate would change by the same amount. For example, if the Scotiabank prime rate were raised to 3.25%, your mortgage rate would rise with it to 2.75%.
This rule doesn’t apply to fixed mortgage rates. When you get a fixed-rate mortgage, your mortgage rate is guaranteed not to change for the entire term. This mitigates your risk in the event rates go up, because your rate won’t change. However, if rates go down you won’t enjoy the added benefit. Fixed rates are best if you think mortgage rates will go up, or if you want the stability of knowing exactly what rate you’ll be paying regardless of what happens in the market.
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