Question 1

What is the Bank of Canada policy interest rate?

Accepted Answer

The Bank of Canada policy interest rate, also known as the target for the overnight rate, is the key interest rate set by the Bank of Canada to influence the Canadian economy. It affects borrowing costs for banks, which then impacts mortgage rates, line of credit rates, and other consumer lending rates across Canada. This rate is reviewed and adjusted eight times per year on scheduled announcement dates.

Question 2

How often does the Bank of Canada change interest rates?

Accepted Answer

The Bank of Canada reviews and sets its policy rate eight times per year on predetermined dates. The Bank can raise, lower, or hold the rate steady at each decision. Rate decisions are announced at 10:00 AM Eastern Time on decision days and are closely watched by financial markets, economists, real estate professionals, and consumers.

Question 3

How does the Bank of Canada rate affect mortgage rates in Canada?

Accepted Answer

When the Bank of Canada changes its policy rate, variable-rate mortgages are affected almost immediately since they are tied to the prime rate. Fixed mortgage rates are influenced more by bond market yields and market expectations but also respond to Bank of Canada rate trends over time. A 0.25% rate change on a $500,000 mortgage can change monthly payments by over $65, significantly impacting affordability for Canadian homebuyers.

Question 4

What is CORRA and how is it different from the prime rate?

Accepted Answer

CORRA (Canadian Overnight Repo Rate Average) is a risk-free interest rate benchmark that measures the cost of overnight borrowing between financial institutions. It replaced CDOR as Canada's primary benchmark rate. The prime rate is the lending rate that banks offer to their best customers, typically set at the Bank of Canada policy rate plus approximately 2.2%. CORRA influences variable-rate mortgages and other financial products.

Question 5

What is the current prime rate at major Canadian banks?

Accepted Answer

All major Canadian banks (RBC, TD, Scotiabank, BMO, CIBC) typically set their prime rate at the same level, approximately 2.2% above the Bank of Canada policy rate. When the Bank of Canada changes its policy rate, the major banks usually adjust their prime rates within days. This page tracks all five major bank prime rates in real-time.

Question 6

How does the Bank of Canada rate affect Canadian real estate prices?

Accepted Answer

Higher Bank of Canada rates generally cool the housing market by reducing affordability, slowing buyer demand, and increasing carrying costs for homeowners with variable-rate mortgages. Lower rates tend to stimulate housing demand, increase competition among buyers, and push home prices higher. The relationship is cyclical — rate hikes create buying opportunities while rate cuts can lead to bidding wars in competitive markets like Toronto, Vancouver, and Ontario's Greater Golden Horseshoe.

Question 7

When is the next Bank of Canada rate decision?

Accepted Answer

The Bank of Canada announces rate decisions on a fixed schedule of eight dates per year. The countdown timer on this page tracks the next upcoming decision date. Upcoming decisions for 2025 and 2026 are listed on this page with a live countdown so you can stay ahead of potential rate changes that may affect your mortgage or buying decisions.

Rate Change	$500,000 Mortgage	$750,000 Mortgage	$1,000,000 Mortgage
-0.50%	-$131/mo	-$196/mo	-$261/mo
-0.25%	-$65/mo	-$97/mo	-$130/mo
-0.10%	-$26/mo	-$39/mo	-$52/mo
+0.10%	+$26/mo	+$39/mo	+$52/mo
+0.25%	+$65/mo	+$97/mo	+$130/mo
+0.50%	+$131/mo	+$196/mo	+$261/mo
+0.75%	+$197/mo	+$295/mo	+$394/mo
+1.00%	+$264/mo	+$396/mo	+$528/mo

Bank of Canada Rate Tracker

Current Bank of Canada Policy Interest Rate & Real Estate Implications

How BOC Monetary Policy Decisions Are Made

Historical Trend of Bank of Canada Policy Rate

Scheduled Policy Rate Announcement Dates

The Overnight Rate: What It Means for Borrowing Costs

Impact of Policy Rate on Mortgage Payments

Impact of Interest Rates on the Canadian Real Estate Market

Data Source