Canadian banks raise prime lending rate to 3.45% in wake of Bank of Canada move

TORONTO — Canada’s biggest banks will hike their prime rate by a quarter of a percentage point on Thursday, putting financial pressure on homeowners with variable rate mortgages.

The Royal Bank of Canada (TSX:RY) was first to announce its prime rate will rise to 3.45 per cent, shortly after the Bank of Canada raised its key short-term rate by a quarter-point to 1.25 per cent.

RBC was followed by Bank of Montreal (TSX:BMO), CIBC (TSX:CM), Scotiabank (TSX:BNS), TD Canada Trust (TSX:TD), National Bank (TSX:NA), Desjardins Group, HSBC Bank Canada, Laurentian Bank of Canada (TSX:LB) and B2B Bank.

Banks tend to raise their own prime rates after the central bank raises its key lending rate, which affects wholesale borrowing costs for the major lenders and the retail borrowing rates they charge consumers.

The prime rate is used as a benchmark for variable-rate mortgages and some lines of credit.

Consumers with a fixed-rate mortgage will be unaffected by the Bank of Canada’s move on Wednesday until it’s time for the borrower to renew the mortgage.

The major banks recently raised some of their fixed-rate mortgage rates to reflect their costs of borrowing on bond markets, which have more effect on longer-term mortgage rates than does the Bank of Canada’s overnight rate.

As of Wednesday, several banks had posted five-year fixed-rate mortgages at 5.14 per cent — although lenders will often charge less than the posted rates. Posted fixed rates were lower for mortgages with shorter terms.

Just Posted

Alberta’s biathlon women sweep the podium

Alberta biathletes take four medals, including silver in men’s race, on Sunday

Red Deer songwriter draws on winter, childhood to write Games closing ceremonies song

Kayla Williams is excited to perform ‘Something Right’ March 2 at the Centrium.

House in Calgary destroyed in fire following apparent explosion, officials say

CALGARY — A house was destroyed when a fire broke out following… Continue reading

Historic win for Team Nunavut at Canada Winter Games

Four years in the making boiled down to a collection of firsts… Continue reading

Historic win for Team Nunavut at Canada Winter Games

Four years in the making boiled down to a collection of firsts… Continue reading

Chicago police: Jussie Smollett assault case has ‘shifted’

Chicago police said Saturday the investigation into the assault reported by Jussie… Continue reading

Still-active human rights case speaks to lasting homophobia in Canada: activists

ST. JOHN’S, N.L. — Just over 14 years ago, the government of… Continue reading

Alberta missionaries among the Canadians heading home from riot-stricken Haiti

MONTREAL — A Canadian couple who had to leave Haiti due to… Continue reading

Man charged in daughter’s death in hospital with self-inflicted gunshot wound: police

Police say a man charged with first-degree murder in the death of… Continue reading

Cabinet expected to extend deadline to reconsider Trans Mountain pipeline

OTTAWA — Canada’s energy regulator will tell the federal government this week… Continue reading

South African activists try to protect endangered pangolins

JOHANNESBURG — As World Pangolin Day is marked around the globe, Saturday,… Continue reading

Fourteen ‘dream’ homes ordered evacuated as sinkholes open in Sechelt, B.C.

Greg and Gerry Latham spent Friday morning scrambling to pack up family… Continue reading

Former B.C. premier Gordon Campbell accused of sexual assault: British newspaper

LONDON — A British newspaper says police in London are investigating an… Continue reading

Most Read