The rate charged by a lender on the outstanding mortgage balance, expressed as an annual percentage. In Canada, mortgage interest is compounded semi-annually (not monthly) by law under the Interest Act, which affects the effective rate borrowers pay. Canadian mortgages are offered as either fixed rates (locked in for the term) or variable rates (tied to the lender’s prime rate). The Bank of Canada’s overnight rate significantly influences variable and new fixed mortgage rates across the country.
Synonyms:
mortgage interest rate|mortgage rate