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Banks raise prime rate to 3.7 per cent following Bank of Canada rate hike

Last Updated Jul 11, 2018 at 2:40 pm MST

A pedestrian walks down the steps of the Bank of Canada on Wellington Street West in Ottawa on Wednesday, July 11, 2018. THE CANADIAN PRESS/Justin Tang

TORONTO – All of Canada’s Big Six banks say they will raise their prime lending rate after the Bank of Canada increased its overnight lending rate to financial institutions.

Royal Bank, TD Canada Trust, BMO, and Scotiabank, CIBC and National Bank all say they will increase their prime rate by a quarter of a percentage point to 3.70 per cent, effective Thursday.

The rates had previously been set at 3.45 per cent.

The increase will raise the cost of borrowing for customers with loans linked to the prime rate such as variable rate mortgages and lines of credit.

The Bank of Canada raised its target for the overnight rate a quarter-point to 1.5 per cent Wednesday.

It was the central bank’s fourth rate increase in the last 12 months.

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