Big Banks Move Prime Rate to 2.75%

Alyssa Furtado
by Alyssa Furtado July 21, 2010 / No Comments

The Bank of Canada announced yesterday it would move the target overnight lending rate from 0.50% to 0.75%. The ripple effect started yesterday, as the 0.25% increase made its way to the major banks` prime lending rate.

Bank Previous Prime Rate Current Prime Rate Previous Variable Rate Current Variable Rate
RBC  2.50% 2.75% 2.50% 2.75%
CIBC  2.50% 2.75% 2.50% 2.60%
BMO  2.50% 2.75% 2.35% 2.60%
Scotia  2.50% 2.75% 2.35% 2.75%
TD  2.50% 2.75% 2.50% 2.75%

The prime lending rate is directly tied to the variable rate mortgages these banks offer. Increases in the prime rate are therefore especially important to those who are currently in or considering a variable rate mortgage as the interest owed on their mortgage will also increase.

As the major bank’s adjust their prime rate we will also see other lenders and brokers following suit. For example ING has already increased its variable rate from 1.90% to 2.15%.