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31 Oct

Big Six Banks Drop Prime Rate to 4.45%, What Canadian Borrowers Should Know

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Posted by: Ash Khan

In late October 2025, Canada’s six largest banks responded swiftly to the Bank of Canada’s latest rate reduction by lowering their prime rates by 25 basis points to 4.45%. This move marks a critical shift in borrowing conditions, particularly for Canadians with variable-rate mortgages or lines of credit. As a trusted mortgage broker in Mississauga and the Greater Toronto Area, I’m here to break down what this means for you, whether you’re looking to buy, refinance or renew.

What Happened: Rate Moves in Brief

  • The Bank of Canada cut its policy rate again, prompting the prime rate change.
  • Following this, Canada’s “Big Six” banks lowered their prime rates from approximately 4.70% to 4.45%.
  • The prime rate is the basis for many variable-rate products such as variable mortgage rates, home equity lines of credit (HELOCs) and some business loans.

Why It Matters for Canadians
1. Relief for Variable-Rate Borrowers
With the prime rate now at 4.45%, those on variable-rate mortgages or HELOCs may see lower borrowing costs. A drop in prime often translates to reduced interest payments.

2. A Strategic Moment for Renewal or Refinance
If your mortgage is up for renewal soon, this prime cut opens the door to evaluating whether sticking with variable, converting to fixed, or negotiating a new deal makes sense.

3. Fixed-Rate vs Variable: Re-evaluating Choices
Fixed-rate borrowers should still monitor bond yields (which influence fixed rates), but a lower prime makes the variable side more attractive.

4. Home Buyers and Affordability Impact
Lower prime rates can improve affordability for new buyers by reducing borrowing costs. For first-time home-buyers, this is significant.

5. Caution: Not an Automatic Pay Cut
Even though the prime is lower, banks might not pass on the full benefit immediately. Also, other factors like term length, credit profile, and amortization still matter.

What Should You Do Now?

  • Check your current mortgage type: Are you on a variable rate, or locked into a fixed term?
  • Review your upcoming renewal or interest-rate reset date.
  • Compare options: Talk to a mortgage broker (like me) who can access 230+ lenders, compare variable vs fixed rates, and check terms.
  • Calculate potential savings: Even small interest-rate changes can add up over a 20- or 25-year amortization.
  • Prepare your documents: If refinancing, you’ll need proof of income, credit check, details on your property, and loan balance.
  • Stay informed: Rate cuts often signal broader shifts in the economy, monitor inflation, employment and housing-market trends.

Why Work With a Mortgage Broker in This Climate

As a fully-licensed mortgage broker in the GTA, I bring you:

  • Access to dozens of lenders (not just the “Big Six”)
  • Expertise to interpret what this prime rate drop means for you
  • Tools to negotiate the best possible terms
  • Personalized service, whether you’re buying, renewing, or refinancing

In a time when the market is shifting, having the right guidance can make a meaningful difference in your mortgage outcome.

The decision by Canada’s big banks to lower their prime rate to 4.45% is good news, especially if you hold a variable-rate mortgage or are about to renew. But the real opportunity lies in taking action. Whether you’re buying your first home, renewing your existing mortgage, or refinancing to access equity, now is the time to get ahead.
Feel free to reach out, and let’s review your mortgage together.