RBC, TD, CIBC and BMO Raise Prime Lending Rates to 4.70%, Starting Tomorrow

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Borrowing money is about to become more expensive for millions of Canadians as four of the country’s largest banks announce higher prime lending rates.

RBC Royal Bank, TD Canada Trust, CIBC and BMO have confirmed that their Canadian prime rates will rise from 4.45% to 4.70%, effective Thursday, October 29, 2026.

The announcements follow the Bank of Canada’s decision on October 28 to increase its benchmark overnight interest rate by 0.25 percentage points to 2.50%.

For households carrying variable-rate mortgages, home-equity lines of credit or other prime-linked loans, the change could mean higher interest costs. Some borrowers will see their regular payments increase, while others will pay down their debt more slowly. The financial impact depends on the type of loan and its repayment terms.

RBC Raises Prime Rate as Variable Mortgage Borrowers Face Higher Interest Costs

RBC Royal Bank confirmed that its prime lending rate will increase from 4.45% to 4.70% on October 29, a rise of 25 basis points. The number looks modest, but its effect grows with outstanding debt. On a $400,000 loan balance, an additional quarter percentage point represents approximately $1,000 in extra interest over a full year if the balance remains unchanged. Actual borrowing costs will differ as balances and contract terms change.

For many RBC variable-rate mortgage borrowers, however, the immediate effect may not be a higher monthly payment. RBC explains that its variable-rate mortgages commonly maintain regular payments as the interest rate changes. When rates rise, a greater share of each payment goes toward interest and less toward reducing the mortgage balance. That can lengthen the repayment period or require later adjustments. The practical step is to check the mortgage statement rather than assume an unchanged payment means an unchanged cost.

TD Increases Prime Rate, but Mortgage Borrowers Should Check Their Loan Terms

TD Canada Trust also announced a 25-basis-point increase, taking its TD Prime Rate to 4.70% effective October 29. There is a detail worth noting for homeowners: TD publishes a separate reference called the TD Mortgage Prime Rate. Its variable-rate mortgage products are tied to that mortgage-specific benchmark, not necessarily the general TD Prime Rate quoted in the announcement. Borrowers therefore need to look at their actual mortgage agreement before calculating a revised interest rate.

For other prime-linked borrowing, the arithmetic is more direct. A quarter-point increase adds approximately $25 in annual interest for every $10,000 outstanding if the balance does not change, or just over $2 per month. TD also explains that some variable mortgages have payments that remain fixed even when their interest rates move during the term. The higher borrowing cost then slows principal repayment, and additional action may eventually be needed if payments no longer cover interest.

CIBC’s Higher Prime Rate Could Change Monthly Mortgage and Loan Payments

CIBC confirmed its Canadian prime lending rate is rising from 4.45% to 4.70% on October 29, matching the other banks’ quarter-point increase. Prime is a reference rate rather than the price every customer pays. A loan priced at prime minus one percentage point, for example, moves from 3.45% to 3.70%. A borrower with a fixed-rate mortgage would generally not see the contracted rate change during the existing term, while a variable-rate contract can respond much sooner.

The monthly impact depends on how that contract works. For an illustrative $500,000 adjustable-payment mortgage with 25 years left, moving from 3.45% to 3.70% would increase the monthly payment by approximately $66, assuming standard Canadian mortgage compounding and no other changes. A fixed-payment variable mortgage would behave differently: more money would go to interest instead of principal. That distinction matters when households calculate whether their next payment or their longer-term borrowing cost will rise.

BMO’s Rate Increase Reflects the Bank of Canada’s Renewed Inflation Concerns

BMO Bank of Montreal likewise announced that its Canadian-dollar prime lending rate will increase to 4.70% from 4.45% on October 29. The change affects home-equity credit lines and some personal and business loans tied to prime. On a constant $20,000 balance, a 0.25-percentage-point increase translates into approximately $50 in additional annual interest before any fees or changes to the balance. It is a smaller monthly amount, but one that adds to other living and operating expenses.

The backdrop is a shift in monetary policy. The Bank of Canada raised its overnight target from 2.25% to 2.50% on October 28, citing persistent energy-driven inflation and risks that price pressures could spread more widely. The central bank expects inflation to remain elevated into 2027 and has not ruled out further tightening. Still, another increase is not guaranteed. For borrowers, the immediate development is confirmed: the four announced prime-rate changes take effect October 29.

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