November 1, 2025 —

What Happened

Canada’s six largest banks — RBC, TD, Scotiabank, BMO, CIBC, and National Bank — have lowered their prime lending rate to 4.45 % from 4.70 %, following the Bank of Canada’s 25-basis-point policy-rate cut announced on October 29, 2025.

The prime rate serves as the reference benchmark for most variable-rate mortgages, home-equity lines of credit (HELOCs), and some business-lending products. Because it directly determines what borrowers pay, any movement is felt almost immediately in household budgets.

What It Means for Borrowers

For homeowners with variable-rate loans, this is one of the most tangible forms of mortgage relief seen in over three years. A 0.25 % reduction may sound small, but it can make a meaningful difference over time.

Take an example: a homeowner with a $600,000 variable-rate mortgage priced at Prime – 0.75 % will now see their effective rate drop from 3.95 % to 3.70 %. That’s a savings of roughly $95 to $110 per month — or more than $1,100 per year — depending on amortization and repayment frequency.

For those on adjustable-payment mortgages (where monthly payments move with prime), the change takes effect within one or two billing cycles. For static-payment variable products, more of the payment will now go toward principal rather than interest, helping borrowers chip away faster at their balances.

Rate Landscape Snapshot

Product Type	Rate (Oct 31 2025)	Change vs Last Week
Variable (5-Yr Insured)	3.55 % – 3.75 %	▼ 0.25 %
HELOC (Prime + 0.50 %)	4.95 %	▼ 0.25 %
Fixed (5-Yr Insured)	3.75 % – 3.95 %	≈ Unchanged

Industry trackers such as Ratehub and True North Mortgage confirm that variable deals across several lenders are now in the low 3 % range, while five-year fixed options remain around 3.8 % to 4.0 %, depending on credit profile and down payment.

Expert Commentary

Mortgage strategist Robert McLister told Canadian Mortgage Trends that this is “the first real payment relief in a long time” for borrowers who stayed the course through volatile years.

He explained, “A full percentage-point drop in the Bank of Canada’s policy rate since spring has trimmed roughly $400 a month off payments on a $700,000 loan. Today’s move adds a little more oxygen for stretched households.”

Brokers also note that the timing aligns with the fall renewal wave, giving some flexibility to borrowers deciding whether to stick with variable or lock into shorter fixed terms.

What Borrowers Should Do Now

Confirm your new rate: Lenders automatically adjust prime-linked accounts, but double-check your statement or online portal to ensure it reflects the 4.45 % benchmark.
Revisit your prepayment strategy: With slightly lower interest costs, consider using the savings to pay down extra principal each month — small additions can shorten amortization by years.
Evaluate refinance or switch options: Some lenders are offering limited-time rate-match programs for existing clients.
Keep expectations realistic: The BoC described this as a “measured recalibration,” not the start of a deep-cut cycle. Most economists expect rates to hold steady for several months unless the economy weakens further.

Bottom Line

If you hold a variable-rate mortgage, this week’s prime-rate drop delivers immediate, visible relief. Monthly payments will shrink, amortization stress will ease, and confidence may return for first-time buyers waiting on the sidelines.

However, borrowers should resist assuming a cascade of further cuts. The central bank is signalling patience, and markets still expect only modest adjustments through mid-2026. For now, this is a window of opportunity to rebalance budgets and strengthen household finances while rates are at their lowest in three years.