Average Prime Rate Spread by Decade

Yesterday I showed the historical difference between the Prime Rate and the Bank of Canada rate going back to 1935… that chart is quite impressive and clearly shows the low interest rate era we are living in. To draw some conclusions from that chart, I created the same chart but averaged the rate difference by decades and the numbers are quite interesting…

The Prime Rate in the current decade is 0.25% higher than the past 4 decades! What does this mean to you? Simple, higher interest costs if you have a variable rate mortgage or loan or line or credit.

Decade Average Rate Spread (%) 1930s 2.62 1940s 2.87 1950s 2.16 1960s 1.23 1970s 1.16 1980s 1.21 1990s 1.24 Current 1.55

Source: Bank of Canada