GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Prime Rate


Synonyms:best rate, lowest interest rate, lowest rate, preferred rate, prime, prime lending rate
Filed Under: financial-banking, mortgages
Tags: banking, mortgage, rates
 

Definition of prime rate

prime rate
1. The rate that is suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.

Related Terms and Acronyms:

  • Bank of Canada (BC, BOC)   Canada's central bank.
      ➥  Canada's central bank.
  • Canada Mortgage and Housing Corporation (CMHC)   The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
      ➥  Insures Canadian mortgage lenders.
  • fixed rate mortgage (FRM)   A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
  • interest rate (IR)   The rate a lender charges an individual to borrow money.
  • mortgage rate   The interest rate on a mortgage loan.
      ➥  You can compare mortgage rates using this website by clicking 'Rates' above.
  • mortgage renewal   A renewal as it pertains to the mortgage industry is defined as having an existing mortgage term end and signing a new term to continue.
  • prime lending rate (PLR)   The rate of interest charged on loans by chartered banks to their most creditworthy customers.
      ➥  Bank of Canada's prime (best) lending rate.
  • variable interest mortgage   A loan where the interest rate may vary during the term of the mortgage. The variance is usually tied to some specific factor such as prime bank rate or the guaranteed investment certificate rate for a designated lender.
  • variable rate   A floating percentage value that fluctuates based on certain conditions.
  • variable rate mortgage (VRM)   Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
      ➥  A type of mortgage loan offered by brokers and lenders.

More Related Terms and Acronyms

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