Prime Rate

Definition

  • The rate that is suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.

Synonyms
preferred rate, lowest rate, prime, best rate, lowest interest rate, prime lending rate

Alternate Spellings
Prime Lending Rate, Prime

Related Terms and Acronyms

  • Bank Definition,
    • An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
  • Bank of Canada (BC, BOC) Company Est. 1935, Ottawa, Ontario, Canada, Important,
    • Canada's central bank.
    Canada's central bank.
  • Bank Rate Definition,
    • Closely related to the overnight rate, the bank rate is the interest rate the Bank of Canada charges to banks and other major financial institutions for one-day loans.
  • Canada Mortgage and Housing Corporation (CMHC) Company Est. 1946, Canada-wide, Very Important,
    • The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
    Insures Canadian mortgage lenders.
  • Central Bank Definition,
    • An institution that manages a nation's monetary policy.
  • Chartered Banks Definition,
    • Financial institutions regulated under the Bank Act. Chartered banks are designated as Schedule I or Schedule II depending on their ownership.
  • Fixed Rate Mortgage (FRM) Acronym, Very Important,
    • A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
  • Hybrid Mortgage Definition,
    • A mortgage split into different components in order to better manage risks and costs.
  • Initial Interest Rate Definition,
    • The introductory interest rate on an adjustable-rate mortgage (ARM), which usually changes at a predetermined time.
  • Interest (int, IN) Acronym & Abbreviation,
    • Money paid for the use of borrowed funds, usually expressed as an annual percentage.
    Bank account transaction code.
  • Interest Rate (IR) Acronym, Very Important,
    • The rate a lender charges an individual to borrow money.
  • Lender Definition,
    • The bank or mortgage company offering the loan.
  • Monetary Policy Definition,
    • The Bank of Canada's ability to influence the economy through changes in short-term interest rates and the money supply.
  • Mortgage Rate Definition, Very Important,
    • The interest rate on a mortgage loan.
    You can compare mortgage rates using this website by clicking 'Rates' above.
  • Mortgage Renewal Definition, Very Important,
    • A renewal as it pertains to the mortgage industry is defined as having an existing mortgage term end and signing a new term to continue.
  • Overnight Rate Definition,
    • The interest rate banks use to lend or borrow funds from each other.
  • Posted Rate Definition,
    • The mortgage rates initially offered by a bank which a borrower is then expected to negotiate down.
  • Prime Lending Rate (PLR) Acronym, Very Important,
    • The rate of interest charged on loans by chartered banks to their most creditworthy customers.
    Bank of Canada's prime (best) lending rate.
  • Refinance Definition,
    • To arrange a new loan for an increased amount or better terms whereby the old loan is paid off from the proceeds of the new loan.
  • Sub-prime Borrower Definition,
    • A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.
  • Variable Interest Mortgage Definition, Important,
    • A loan where the interest rate may vary during the term of the mortgage. The variance is usually tied to some specific factor such as prime bank rate or the guaranteed investment certificate rate for a designated lender.
  • Variable Interest Rate Definition,
    • Percentage that a borrower pays for the use of money, and which moves up or down periodically based on changes in other interest rates.
  • Variable Rate Definition,
    • A floating percentage value that fluctuates based on certain conditions.
  • Variable Rate Mortgage (VRM) Acronym, Very Important,
    • Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
    A type of mortgage loan offered by brokers and lenders.
Compare. Calculate. Apply today.
Compare Mortgage RatesMortgage CalculatorsApply for a Mortgage