Canadian banks raise prime lending rate to 3.45% in wake of Bank of Canada move

The Canadian Press
Published Wednesday, January 17, 2018 1:55PM EST
Last Updated Wednesday, January 17, 2018 3:40PM EST
TORONTO — Canada’s biggest banks will hike their prime rate by a quarter of a percentage point on Thursday, putting financial pressure on homeowners with variable rate mortgages.

The Royal Bank of Canada (TSX:RY) was first to announce its prime rate will rise to 3.45 per cent, shortly after the Bank of Canada raised its key short-term rate by a quarter-point to 1.25 per cent.

RBC was followed by Bank of Montreal (TSX:BMO), CIBC (TSX:CM), Scotiabank (TSX:BNS), TD Canada Trust (TSX:TD) and Desjardins Group — a financial co-operative with offices throughout Quebec and parts of Ontario.

Banks tend to raise their own prime rates after the central bank raises its lending rate to them to pass their higher borrowing costs on to consumers.

Commercial lenders use their prime rate as a benchmark for setting some other rates including variable-rate mortgages and some lines of credit.

Source: https://www.ctvnews.ca/business/canadian-banks-raise-prime-lending-rate-to-3-45-in-wake-of-bank-of-canada-move-1.3763834