Prime Rate

Prime Rate

Also known as prime interest rate or prime lending rate. The lowest annual rate of interest that a Canadian commercial bank makes available to its best and most creditworthy customers. A bank may, however, charge an interest rate that is below its prime rate if a borrower is a very low credit risk.
A bank's prime rate is a floating rate of interest that may change from day-to-day. In Canadian loan transactions, the prime rate will be used as a reference rate for loans denominated in Canadian dollars that bear interest at a daily rate.

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