Recent data shared by Canada Statistics states the inflation rate in the country came in at 2.7% as of June 2024 which is down from 2.9% from the previous month. As a result, the prime rate in Canada is expected to rise in 2024. The Prime Rate which is also known by the name Prime Lending Rate is an annual interest rate used by Canada’s banks and financial institutions to set interest rates for loans and lines of credit which also include variable-rate mortgages. The latest updates on the Canada Prime Rate Increase 2024 including the expected increase and concerned possibilities in 2024 are illustrated in this post.
Canada Prime Rate Increase 2024
- The Prime Rate is considered an Anchor between the interest rates that your lender gives you when you apply for a loan with variable interest rates. As a result, when the prime rate in Canada goes up or down, so do the interest rates that you pay to the lender. The prime rates are influenced by the Policy Interest Rate (target for the overnight rate) that is set by the Bank of Canada (BoC). It means a bank’s prime rate is based on the Bank of Canada’s Overnight Rate. As of now, the prime rate in Canada is 6.7% and is expected to experience a hike soon as a consequence of the rise in inflation and cost of living.
- The prime rate in Canada can change eight times a year as per the Bank of Canada’s eight-time announcement of the policy interest rate decisions. From July 2023 to June 2024, the prime rate remained the same at 7.20% which was slightly dropped to 6.95% in June and currently settled at 6.7%. The historic prime rate in Canada ever recorded was 22.75% highest in 1981 and 2.25% in 2009. All kinds of loans are based on these rates which include certain mortgages, car loans, personal lines of credit, and credit cards.
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Canada Prime Rate Increase 2024 Quick Overview
| Article title | Canada Prime Rate Increase 2024 |
| Country | Canada |
| Category | Finance |
| Prime rate implemented by | Bank of Canada |
| Prime rate influenced by | Policy Interest Rate |
| Current prime rate | 6.7% |
| Expected prime rate | 7.5% |
| Year | 2024 |
| Official website | www.bankofcanada.ca |
Canada Prime Rate Changes Over the Years
In 2024, the prime rate in Canada changed in June 2024 from a year-long prime rate of 7.20% to 6.95% which slightly decreased a month later to 6.70%. The Canada Prime Rate changes over the year are mentioned in the table below:
| Effective Date | Prime Rate | Change (base points) |
| July 24, 2024 | 6.70% | -0.25% |
| June 5, 2024 | 6.95% | -0.25% |
| July 12, 2023 | 7.20% | 0.25% |
| June 8, 2023 | 6.95% | 0.25% |
| January 25, 2023 | 6.70% | 0.25% |
| December 8, 2022 | 6.45% | 0.50% |
| October 27, 2022 | 5.95% | 0.50% |
| September 8, 2022 | 5.45% | 0.70% |
| July 14, 2022 | 4.70% | 1.00% |
| June 2, 2022 | 3.70% | 0.50% |
| April 14, 2022 | 3.20% | 0.50% |
| March 3, 2022 | 2.70% | 0.50% |
| March 30, 2020 | 2.45% | -0.50% |
| March 17, 2020 | 2.95% | -0.50% |
| March 5, 2020 | 3.45% | -0.50% |
| October 25, 2018 | 3.95% | 0.25% |
| July 12, 2018 | 3.70% | 0.25% |
| January 18, 2018 | 3.45% | 0.25% |
| September 7, 2017 | 3.20% | 0.25% |
| July 13, 2017 | 2.95% | 0.25% |
| July 16, 2015 | 2.70% | -0.15% |
| January 28, 2015 | 2.85% | -0.15% |
| September 9, 2010 | 2.75% | 0.25% |
| July 21, 2010 | 2.75% | 0.25% |
| June 2, 2010 | 2.50% | 0.25% |
Expected Increased Prime Rate and Possibilities in 2024
As there has been a historic rise in policy interest rates or overnight rates by the Bank of Canada, the prime rate has also seen a hike ever since the coronavirus pandemic struck the globe. After a year-long pause in prime rate and policy interest rate hikes, the Bank of Canada has started to impose the prime rate hikes as a consequence of high inflation and living expenses in the country.
As of July 24, 2024, the Bank of Canada has set the Canada Prime Rate to 6.70% with a 0.25% basis point increase from June 2024. As a result of the hike in prime rate, your mortgage loan, personal line of credit, and credit cards may be affected in 2024. However, there is no confirmed news on how much the Canada Prime Rate Increase in 2024 but it is expected that it may rise to 7.2% since the Bank of Canada can change the Prime rate eight times a year.
Impact on Mortgage and Loans due to Canada Prime Rate Increase 2024
When the Bank of Canada changes the overnight rates, the lenders adjust their prime rates accordingly. The change in the policy interest rate and the prime rate will impact your mortgage rates, especially variable mortgage rates. For instance, recently, as of July 24, 2024, the Bank of Canada implemented a 0.25% increase to the rates and the mortgage rates that you pay to the lenders will rise proportionally.
Similarly, consumer loans which include car loans and personal lines of credit will also increase as a result of the Canada Prime Rate Increase 2024. For more information related to the overnight rates and prime rates in 2024, you can also visit the official website of the Bank of Canada.
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David has spent Several years reporting on the oil and gas industry, uncovering the latest trends and technological breakthroughs. His expertise in energy markets and passion for sustainable practices make his articles both insightful and forward-thinking. Davis’s in -depth analyses are a staple for professionals seeking to stay ahead in this dynamic field.