Bank of Canada interest rate (2026): what moves and what doesn’t

What does the Bank of Canada actually set?

One number: the target for the overnight rate, which the Bank calls its policy interest rate. It’s the rate the Bank wants big financial institutions to charge each other for one-night loans. The Bank Rate and the deposit rate sit just above and below it.

The overnight rate isn’t a rate any consumer pays. It’s what banks and other large institutions charge each other to borrow money for a single night so their accounts balance at the end of each day. The Bank of Canada calls it “the starting point for setting many of the interest rates in the economy that matter for Canadians.” It moves that starting point on eight fixed dates a year, and a change takes effect the day after it’s announced.

Two other rates are set around the target. The Bank Rate is what the Bank of Canada charges an institution that borrows from it for one night. The deposit rate is what it pays an institution that leaves money with it overnight. The Bank calls the range between the two its operating band.

As of November 2026 that band runs from 2.45% to 2.75%, which is 30 basis points wide. The deposit rate sits 5 basis points below the target, and the Bank Rate sits 0.25 of a percentage point above it. The Bank calls this a floor system, because the target sits at or just above the bottom of the band. Until January 2025 the deposit rate was set equal to the target; the Bank moved it 5 basis points lower that month.

For a household, the three numbers move together, so the one to watch is the policy rate. When news reports say the Bank “cut rates by a quarter point,” they mean the target moved by 0.25 of a percentage point, and the Bank Rate and deposit rate moved with it. None of the three appears in a mortgage, line of credit or credit card agreement. What appears there, if anything, is your own lender’s prime rate.

The Bank’s own explainer says the policy rate affects the prime rate of commercial banks, which is used for loans such as mortgages and lines of credit, and the rates paid on deposits and GICs. That sentence is accurate, but it skips a step. The Bank doesn’t write a rate into any consumer’s contract. Your lender does, and the next section is about the step in between.

Who sets the prime rate in Canada?

Each bank sets its own. There’s no single Canada prime rate. TD, RBC, Scotiabank, BMO, CIBC and National Bank each publish a prime rate, define it in their own agreements and change it when they choose. As of November 2026, all six post 4.70%.

The definitions say so plainly. TD’s cardholder agreement describes the TD Prime Rate as “the variable annual interest rate published by us from time to time.” RBC’s credit card agreement (the 2017 version posted online) calls its Prime Rate the rate “we announce from time to time” for Canadian dollar commercial loans. National Bank’s credit card information box describes its prime as the rate “that we announce publicly from time to time.” None of them refers to the Bank of Canada.

In practice the big banks move together and quickly. After the Bank of Canada’s cut on October 29, 2025, TD, BMO, CIBC and National Bank each announced the same day that their prime would drop by 25 basis points, from 4.70% to 4.45%, effective October 30, 2025. That was the same day the Bank’s own change took effect.

The gap between prime and the policy rate has also held steady at the big banks lately. With the policy rate at 2.50% and prime at 4.70% after the October 2026 increase, the spread is 2.20 percentage points. Before that increase it was 4.45% against 2.25%, and before the October 2025 cut 4.70% against 2.50%: the same 2.20 percentage points each time. That spread is a habit, not a rule. Nothing in the Bank of Canada’s framework requires a bank to keep it, match a rival or move on announcement day.

That’s why your contract names your lender’s prime, not “the” prime. A Scotiabank student line of credit is priced off Scotiabank Prime. An RBC student line of credit is priced off RBC Prime. If one bank ever lagged or moved by a different amount, only its own customers would feel it. To see your lender’s current prime, use its own rate page: TD lists it on its today’s rates and prime page, BMO on its prime and base rates page, and National Bank on its rates page.

What moves when the rate changes, and what doesn’t?

Anything priced as prime plus or minus a margin moves when your lender moves its prime. Anything with a rate fixed for a term doesn’t move until that term ends. The table below sorts common products by that line, and names the document that decides for yours.

Variable-rate mortgages come in two kinds, and the difference matters more than the rate. The Financial Consumer Agency of Canada (FCAC) describes both. With fixed payments, your payment stays the same when the rate changes; what changes is the split. When the rate falls, more of each payment goes to principal. When it rises, more goes to interest. Scotiabank’s Ultimate Variable Rate Mortgage is one example: its payments are set at the start and “will not change for the full term,” while the rate changes “automatically as Scotiabank’s prime rate changes.”

With adjustable payments, which lenders often call an adjustable-rate mortgage, the payment itself changes when the rate changes. A cut lowers the payment; an increase raises it. Some fixed-payment contracts also have what FCAC calls a trigger point: if rates rise enough that the payment no longer covers the interest, the lender may raise your payment. FCAC says the trigger point is listed in your mortgage contract.

A fixed-rate mortgage doesn’t move mid-term. FCAC’s wording is that fixed rates “stay the same for your entire term.” A rate change reaches you at renewal, when your lender sends a renewal statement with the new rate. If your mortgage is with a federally regulated lender, such as a bank, that statement must arrive at least 21 days before the term ends. FCAC also warns that renewal may be automatic if you don’t act, and the statement says so.

HELOCs, unsecured lines of credit and student lines of credit are usually priced as your lender’s prime plus a margin. FCAC’s example for a HELOC is prime plus 1%. Scotiabank’s student line of credit charges Scotiabank prime plus 0.50% while you’re in school, and Scotiabank says the rate “will vary when Scotiabank Prime changes.” FCAC adds that a lender may change a HELOC rate at any time, and that federally regulated lenders must give written notice within 30 days.

On the savings side, nothing is formally linked. Savings account rates are posted by each bank and can change at any time. RBC’s terms for its High Interest eSavings account say the rate is subject to change “at any time without notice,” and its FAQ says the rate “will change when the Bank of Canada’s rate changes.” A fixed-rate GIC is the opposite: RBC describes its GIC rates as “guaranteed for the full term.” The rate you locked in stays until maturity, whatever the Bank does.

Does your credit card interest rate move?

Almost certainly not. Most standard Canadian credit cards carry a fixed annual rate set out in the cardholder agreement and the Disclosure Statement or information box. It isn’t tied to prime, so a Bank of Canada cut changes nothing on your statement.

TD’s cardholder agreement shows how it works. Section 4.8, “How do we calculate and charge interest?”, says TD charges interest “at the applicable annual interest rate(s) shown in your Disclosure Statement.” Section 7.1 says TD may change those rates and “will notify you in writing.” There’s no reference to prime for a standard card.

RBC’s credit card agreement says the same in its section on standard annual fees, grace periods and annual interest rates. Your current rates are set out on your monthly statement, and they may be fixed rates or variable rates based on RBC’s Prime Rate. For fixed rates, RBC gives at least 30 days’ written notice of an increase, other than one caused by a rise in prime.

Prime-linked consumer cards do exist in Canada. The TD Emerald Flex Rate Visa is one: TD’s agreement says its rates are variable, set by adding a fixed margin to the TD Prime Rate, and that “if TD Prime Rate decreases, your total variable interest rates will also decrease.” TD can change its prime without notifying you in advance. It can also change the margin, including based on your creditworthiness, with written notice.

National Bank’s Syncro Mastercard is another. Its information box sets purchases at prime rate plus 4.00%, with a minimum rate of 8.90%, and cash advances and balance transfers at prime rate plus 8.00%, with a minimum of 12.90%. The same information box lists fixed regular rates for National Bank’s other cards, such as 20.99% on purchases. So even within one bank, the card decides.

FCAC’s rules also explain why you’d hear about an increase but not a drop. Card issuers must give written notice at least 30 days before most changes take effect. Two changes need no advance notice and simply appear on your next statement: a decrease in the interest rate, and a change in the base rate linked to a variable interest rate.

To see what your own rate costs on a balance you carry, the credit card interest calculator works it out from your rate and payment.

When is the next Bank of Canada rate announcement?

The next scheduled announcement is Wednesday, December 9, 2026, the last one of the year. The Bank announces on eight fixed dates a year, publishes the schedule well in advance, and has already released its 2027 dates.

Four of the eight dates each year come with the Monetary Policy Report, the Bank’s fuller forecast. In 2027 those are the January, April, July and October announcements. Once a change is announced, it takes effect the next day.

For any date beyond these, use the Bank of Canada’s Upcoming Events page, which lists scheduled announcements, and its policy interest rate page, which shows each year’s schedule alongside the most recent decisions. Those two pages are where the schedule is published first.

How long until a rate change reaches you?

For products priced off prime, about a day: after both 2025 cuts, the big banks’ new prime took effect the day after the announcement. Fixed-rate products wait until renewal or maturity. Fixed-rate credit cards never follow at all.

The September 2025 cut followed the same pattern. The Bank announced it on September 17, 2025, and the new policy rate of 2.50% took effect September 18. TD and CIBC both announced on September 17 that their prime would fall by 25 basis points to 4.70%, effective September 18, 2025. CIBC’s release gives the move as 4.95% to 4.70%.

From there, the lag depends on the product. A HELOC or line of credit priced at prime plus a margin uses the new prime from the day it takes effect, so the next month’s interest reflects it. A variable-rate mortgage does too, though with fixed payments you won’t see a different payment, only a different split between principal and interest.

Prime-linked cards can lag further. RBC’s agreement (the 2017 version posted on its site) says that for variable-rate cards, the prime rate in effect on the first business day of the month in which your statement is prepared applies for the whole statement period. A cut that takes effect mid-month may not show up until the following statement. That version also caps the prime portion of a variable card rate at 9%.

Fixed-rate mortgages and GICs reach the new level only at renewal or maturity, which could be years away. Savings accounts have no set lag at all: the bank can change the posted rate on any day, before or after an announcement, or not at all.

Bank of Canada interest rate history

The Bank cut its policy rate nine times between June 2024 and October 2025, from 5.00% to 2.25%. That’s 2.75 percentage points in total. It held at 2.25% at every announcement from then until September 2, 2026. On October 28, 2026 it raised the rate by 25 basis points to 2.50%, effective the next day.

To look up the full history yourself, the Bank of Canada’s policy interest rate page lists recent decisions with the date and size of each change. Its interest rates pages hold longer series. Each decision also has its own press release on bankofcanada.ca, which gives the new target, Bank Rate and deposit rate.

For a daily record, the Bank’s Valet service publishes the target for the overnight rate as a data series you can download. It showed 2.25% on every business day from October 30, 2025 until the October 2026 increase to 2.50% took effect. Valet also carries the Bank Rate as its own series, which moved to 2.75% at the same time.

History is useful context, but it’s a poor forecast. The Bank doesn’t commit to a path, and each decision is made on the scheduled date. What the table does show is how the big banks’ prime tracked it: at 4.70% and 4.45% after the last two cuts, and back to 4.70% after the October 2026 increase, each time 2.20 percentage points above the policy rate.

What should you do after an announcement?

Start with your own paperwork, not the headline. Find the line in each contract that sets your rate and check whether it names prime. If it does, the change reaches you through your lender. If it doesn’t, the announcement changes nothing until renewal or maturity.

If you carry a balance on a fixed-rate credit card, a Bank of Canada cut changes nothing. The levers that do change your cost are the rate on the card itself and how fast you pay it down. A low-interest credit card carries a lower fixed rate, and the balance transfer calculator shows what moving a balance to a promotional rate would save after the transfer fee.

If you have a variable-rate mortgage with fixed payments, a cut doesn’t lower your payment. It sends more of each payment to principal. If your payments are adjustable, the payment changes, and your lender will tell you the new amount. Either way, the mortgage contract says which kind you have.

If you have a HELOC or line of credit, a cut lowers the interest charged once your lender’s prime changes. If you make interest-only payments, which FCAC notes some lenders allow, your minimum payment drops with it. The balance doesn’t; only payments above the interest reduce it.

If your fixed-rate mortgage is coming up for renewal, the rate that matters is the one in your renewal statement. A federally regulated lender must send it at least 21 days before the term ends. You don’t have to accept it, and you can compare current mortgage rates before you sign.

On the savings side, a cut tends to lower posted savings rates, though there’s no rule on timing. A fixed-rate GIC keeps its rate until maturity. Compare savings accounts and GIC rates by the rate they pay today, and check whether a high rate is a promotional one that ends after a set period.