Equitable Bank Slashes Prime Rate: A Boon for Borrowers

Equitable Bank, Canada's Challenger Bank™, has announced a significant reduction in its prime lending rate, from 5.95% to 5.45%. This move, effective December 12, 2024, is a welcome relief for borrowers, as it makes loans more affordable and accessible. The reduction follows the Bank of Canada's rate cut, aligning Equitable Bank with the broader market trend.



The prime rate is a benchmark interest rate used by banks to set the rates for variable-rate loans, such as mortgages and lines of credit. A lower prime rate means lower interest costs for borrowers, making it easier for them to manage their repayments and potentially qualify for larger loans.

For customers with variable-rate mortgages, the reduction in Equitable Bank's prime rate will significantly impact their monthly payments. Assuming a $200,000 mortgage with a 25-year amortization, the new monthly payment would be approximately $1,050, a $50 decrease from the previous rate. This reduction represents a 4.5% decrease in monthly payments, providing customers with additional financial flexibility.

Customers with lines of credit will also see potential savings as a result of the lower prime rate. Assuming a line of credit balance of $10,000, the monthly interest cost would decrease by approximately $1.50, resulting in annual savings of around $18. This reduction, while modest, contributes to overall cost savings for borrowers.

Equitable Bank's prime rate reduction is a strategic move that aligns with its mission to drive change in Canadian banking and enrich people's lives. By making loans more affordable, the bank aims to enhance the borrowing experience for its customers and provide them with more financial flexibility.

In conclusion, Equitable Bank's reduction in the prime lending rate is a positive development for borrowers, making loans more accessible and affordable. As the bank continues to focus on enhancing its digital platforms and responding to customer needs, it remains committed to creating an inclusive and affordable banking environment for all Canadians.