10/07/2025
Ever wonder why your mortgage or line of credit rate changes when the Bank of Canada makes an announcement?
Here’s the breakdown in plain language:
✅ The policy rate is the interest rate the Bank of Canada sets for banks when they borrow from each other. It’s their main tool to control inflation and keep prices stable.
✅ The prime rate is what banks charge YOU on variable-rate loans—like mortgages, personal loans, or business credit.
👉 The connection? When the Bank of Canada changes its policy rate, banks usually move their prime rates up or down by about 2%.
So, if the policy rate goes up, borrowing gets more expensive. If it goes down, you’ll usually see some relief on your loan pa-yments.
Understanding this link helps you see why interest rates change—and how it affects your wallet. 💵
Contact us for more details.
Visit www.onegoldtree.com