BMO Prime Rate
About BMO's Prime Rate
As of December 21, 2024, Bank of Montreal’s prime rate is currently 5.45%. This prime rate is used for BMO’s variable-rate loans, which includes variable-rate mortgages, lines of credit, and personal loans. Since it is a variable rate, the interest rate may change during your loan term if BMO’s prime rate changes. This is usually based on changes in the Bank of Canada’s policy interest rate. If you don’t want your interest rate to change, then some loans may allow you to lock in an interest rate with a fixed rate.
When Did BMO’s Prime Rate Change?
On December 11, 2024, BMO decreased their prime rate by 0.5% from 5.95% to today’s prime rate of 5.45%.
BMO Prime Rate History
How Does the Prime Rate Work?
All banks in Canada have their own prime rate. Typically, prime rates in Canada are the same between banks and financial institutions. That’s because prime rates usually follow rate changes as announced by the Bank of Canada in their policy interest rate. If the Bank of Canada announces a rate hike of 0.25%, then you can expect BMO's prime rate to increase by 0.25% too.
The prime rate is what banks and financial institutions use to price their loans. A spread is then added to the prime rate, which can be a discount, premium, or be the same as the prime rate. This means that some loans may have an interest rate lower than BMO’s prime rate, while others might have a rate that is higher than BMO’s prime rate.
Secured loans, such as mortgages, are more likely to have an interest rate that is at or below prime, while unsecured loans, such as personal loans, are less likely to get a discount to prime. While the loan type plays a large role, your interest rate will depend on other factors as well. This might include your credit score, income, debt levels, assets, and collateral. The “adjustment factor” refers to the difference between your loan rate and the current prime rate.
How Does BMO Announce Prime Rate Changes?
BMO publicly announces their prime rate changes through a press release. This is usually on the same day of any Bank of Canada rate decision that results in a change. Bank of Canada rate decisions are made on a fixed schedule eight times per year.
Usually, the effective date of the change is the day after the announcement. For example, BMO last announced a change in its prime rate on December 11, 2024. The new prime rate will be effective on BMO loans starting December 12, 2024.
How Did The Latest BMO Prime Rate Change Affect Your Mortgage?
BMO variable-rate borrowers will be immediately impacted by any change in the BMO prime rate. The latest 0.5% decrease in BMO’s prime rate meant that interest rates will be going down for borrowers with a variable mortgage rate. Just how much would BMO’s latest prime rate change save you?
On a $500,000 mortgage, a 0.5% decrease in the prime rate would save you approximately $208.33 per month.
Enter your mortgage balance below to see how BMO’s latest prime rate change would affect your mortgage.
Impact of BMO’s Prime Rate Change of -0.5%
| Mortgage Balance | Effect On Monthly Interest |
|---|---|
| $100,000 | $41.67 less per month |
| $200,000 | $83.33 less per month |
| $300,000 | $125.00 less per month |
| $400,000 | $166.67 less per month |
| $500,000 | $208.33 less per month |
| $600,000 | $250.00 less per month |
| $700,000 | $291.67 less per month |
| $800,000 | $333.33 less per month |
| $900,000 | $375.00 less per month |
| $1,000,000 | $416.67 less per month |
What Happens When BMO's Prime Rate Increases?
BMO's variable rates will increase if BMO’s prime rate increases. For example, if BMO’s prime rate is currently 5.45% and the Bank of Canada announces a rate hike of 0.25%, you can expect BMO's prime rate to increase to 5.70%.
How this change in BMO's prime will impact you will depend on what type of loan you have. If you have a variable-rate mortgage, then your interest rate will change but the amount of your scheduled mortgage payments will stay the same. If the prime rate has increased, then more of your payments would go towards mortgage interest, with less left over to pay the principal. This can make you fall behind on your original mortgage amortization, meaning that it will take you longer to pay off your mortgage.
It’s possible for your mortgage payment to not even be enough to cover the interest if BMO’s prime rate increases significantly during your mortgage term. This is called hitting your mortgage trigger rate. You might be required to increase your mortgage payment or make a lump-sum payment to cover the interest if this occurs.
With an adjustable-rate mortgage, the required payment amount will also change if the interest rate changes. This means that an adjustable-rate mortgage will never hit a mortgage trigger rate, even if BMO’s prime rate increases significantly. However, a higher rate means that your lender will require you to pay more money. This allows for your loan principal payments to remain the same, and so your loan's amortization will be unchanged.
Does BMO’s Prime Rate Affect All BMO Interest Rates?
Not all BMO interest rates are directly impacted by changes in BMO’s prime rate. That’s because there are different kinds of loans and mortgage rates . For example, if you already have a fixed-rate loan with BMO, then a change in the prime rate will not affect your loan’s interest rate today. Getting a fixed-rate mortgage will lock in an interest rate for your term length. Fixed mortgage rates are also usually based on government bond yields, not the prime rate.
BMO Fixed Mortgage Rates
| Term | BMO Rate | Lowest Rates of Big 6 Banks |
|---|
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time. *Terms and conditions apply
BMO Variable Mortgage Rates
| Term | BMO Rate | Lowest Rates of Big 6 Banks |
|---|
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time. *Terms and conditions apply
BMO Loans & Lines of Credit
BMO Personal Loans
BMO personal loans can have either a fixed or variable interest rate. Just like deciding between a fixed or variable mortgage, you'll need to decide which one works best for you. The minimum amount that you can borrow with a personal loan is $5,000, with a maximum term length of 5 years.
BMO Car Loans
BMO car loans can also have either a fixed or variable rate. The minimum amount that you can borrow is $7,500, with terms of up to 8 years. BMO car loans must be applied through your dealership. Otherwise, you can get a personal loan or a line of credit to finance your car purchase.
BMO Retro-Activator RRSP Loan
If you have unused RRSP contribution room, you can borrow money to contribute towards your RRSP in order to get a tax refund. That’s because RRSP contributions reduce the amount of income tax that you pay. BMO lets you borrow money to contribute towards your RRSP with their Retro-Activator RRSP loan. It can have either a fixed or variable interest rate, with a term length of up to 15 years. The minimum borrowing amount is $7,500.
BMO also offers a line of credit, called the RRSP ReadiLine, that lets you borrow money to contribute towards your RRSP every year. Since the BMO RRSP ReadiLine is a line of credit, it has a variable interest rate based on BMO’s prime rate.
BMO Lines of Credit
All BMO lines of credit have a variable interest rate that changes when the BMO prime rate changes. This includes personal lines of credit and home equity lines of credit (HELOC). BMO also offers a readvanceable mortgage that combines a HELOC with a mortgage. As you make mortgage payments, your BMO HELOC credit limit will increase.
BMO Student Line of Credit
The interest rate for BMO’s student line of credit varies based on your program. Professional students, such as those pursuing a postgraduate degree, can have a variable interest rate as low as BMO Prime + 1%. Medical and dental students can have a rate as low as BMO Prime - 0.25%. The current BMO student line of credit rates are shown below.
BMO Student Line of Credit Rates
Professional Students: Starting from 6.45% (Prime + 1.0%)
Medical and Dental Students: Starting from 5.20% (Prime - 0.25%)
BMO GIC Rates
The BMO GIC rates below are current as of December 21, 2024.
| Provider | 3-Month | 6-Month | 9-Month | 1-Year | 1.5-Year | 2-Year | 3-Year | 4-Year | 5-Year |
|---|---|---|---|---|---|---|---|---|---|
2.75% 3-Month | 3.10% 6-Month | 3.00% 9 Month | 3.00% 1-Year | 3.05% 1.5-Year | 3.10% 2-Year | 3.30% 3-Year | 3.25% 4-Year | 3.30% 5-Year |
BMO Variable Rate GIC
Most BMO GICs have a fixed interest rate. For those looking for a variable rate, BMO offers a GIC that is linked to BMO’s prime rate. If BMO’s prime rate increases, then the interest paid on your variable rate GIC will increase too. However, if the prime rate decreases, your GIC’s interest rate will decrease.
The BMO Variable Rate GIC is a cashable GIC. This means that you can withdraw some or all of the funds at any time. Withdrawing within 30 days of the issue date of the GIC will cause no interest to be paid. Interest will be paid if you wait more than 30 days to withdraw. The term length of this GIC is 364 days, with a minimum investment amount of $5,000. It is not eligible to be held in any registered account, such as an RRSP or TFSA.
Disclaimer:
- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
- Financial institutions and brokerages may compensate us for connecting customers to them through payments for advertisements, clicks, and leads.
- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.