Prime rate
The prime rate or prime lending rate is an interest rate used by banks, typically representing the rate at which they lend to their most creditworthy customers. Some variable interest rates may be expressed as a percentage above or below prime rate.[1]: 8
The prime rate is used often as an index in calculating rate changes to adjustable-rate mortgages (ARM) and other variable rate short-term loans. It is used in the calculation of some private student loans. Many credit cards and home equity lines of credit with variable interest rates have their rate specified as the prime rate (index) plus a fixed value commonly called the spread or margin.
Use in different banking systems
[edit]United States and Canada
[edit]Historically, in North American banking, the prime rate represented actual interest rate charged to borrowers, although this is no longer universally true. The prime rate varies little among banks and adjustments are generally made by banks at the same time, although this does not happen frequently. As of 23 June 2025[update], the prime rate was 7.50% in the United States[2] and 4.95% in Canada.[3]
In the United States, the prime rate runs approximately 300 basis points (or 3 percentage points) above the federal funds rate, which is the interest rate that banks charge each other for overnight loans made to fulfill reserve funding requirements. The federal funds rate plus a much smaller increment is frequently used for lending to the most creditworthy borrowers, as is LIBOR, the London Interbank Offered Rate. The Federal Open Market Committee (FOMC) meets eight times per year to set a target for the federal funds rate.
Prior to December 17, 2008, the Wall Street Journal followed a policy of changing its published prime rate when 23 out of 30 of the United States' largest banks changed their prime rates. Recognizing that fewer, larger banks now control most banking assets (that is, it is more concentrated), the Journal now publishes a rate reflecting the base rate posted by at least 70% of the top ten banks by assets.
Malaysia
[edit]Effective January 2, 2015, the Base Lending Rate (BLR) structure was replaced with a new Base Rate (BR) system. Under the BR system, which serves as the main reference rate for new retail floating rate loans, Malaysian banks can determine their interest rate based on a formula set by Bank Negara, Malaysia's central bank.[4]
Malayan Banking Bhd (Maybank) has set a group-wide base rate at 3.2%, effective Jan 2, 2015. All new retail loans and financing such as mortgages, unit trust loans, share margin financing, personal financing and overdraft facilities which are applied for by individual customers will be based on the base rate.[5] Though certain banks may be setting a higher BR compared to others, they can sometimes offer lower ELR to customers in order to remain competitive.[6] Loans approved and extended before January 2, 2015 continue to follow the old BLR until the end of their loan tenure.
List of countries
[edit]This is a list of countries by commercial bank prime lending rate, charged on new loans to their most credit-worthy customers. Each entry is denominated in the respective national currency. The list is sourced by Trading Economics and World Bank.
| Country | Commercial bank prime lending rate (%) |
Date of information |
|---|---|---|
 Argentina
|
61.70 | 2024 |
 Brazil
|
58.30 | June 2025 |
 Madagascar
|
53.60 | 2023 |
 Zimbabwe
|
42.50 | July 2025 |
 Malawi
|
37.10 | 2024 |
 Egypt
|
24.20 | June 2025 |
 DR Congo
|
23.30 | 2021 |
 Uzbekistan
|
23.10 | 2024 |
 Russia
|
21.75 | June 2025 |
 Mozambique
|
21.70 | 2024 |
 Gambia
|
20.80 | 2023 |
 Sierra Leone
|
20.40 | 2024 |
 Ukraine
|
19.96 | June 2025 |
 Kyrgyzstan
|
19.80 | 2024 |
 Angola
|
18.49 | July 2025 |
 Sao Tome and Principe
|
17.80 | 2023 |
 Colombia
|
16.40 | 2024 |
 Rwanda
|
16.00 | 2024 |
 Honduras
|
16.00 | 2024 |
 Mongolia
|
16.00 | 2021 |
 Dominican Republic
|
15.30 | 2024 |
 Kenya
|
15.28 | June 2025 |
 Suriname
|
14.80 | 2024 |
 Myanmar
|
14.80 | 2020 |
 South Sudan
|
14.70 | 2024 |
 Azerbaijan
|
14.70 | 2024 |
 Haiti
|
14.20 | 2023 |
 Nigeria
|
14.00 | 2023 |
 Armenia
|
13.10 | 2024 |
 Tanzania
|
12.68 | June 2025 |
 Micronesia
|
12.60 | 2021 |
 Paraguay
|
12.50 | 2021 |
 Iceland
|
12.50 | 2024 |
 Liberia
|
12.44 | May 2025 |
 Guatemala
|
12.40 | 2024 |
 Georgia
|
12.00 | 2024 |
 Jamaica
|
12.00 | 2024 |
 Maldives
|
11.60 | 2024 |
 Mexico
|
11.20 | 2024 |
 Lesotho
|
11.20 | 2024 |
 Burundi
|
11.20 | 2023 |
 Namibia
|
11.00 | 2024 |
 New Zealand
|
10.97 | July 2025 |
 Eswatini
|
10.90 | 2024 |
 Bahamas
|
10.62 | June 2025 |
 East Timor
|
10.60 | 2024 |
 Bhutan
|
10.50 | 2024 |
 South Africa
|
10.50 | July 2025 |
 Australia
|
10.26 | July 2025 |
 Belarus
|
10.00 | 2024 |
 Uruguay
|
9.90 | 2024 |
 Bangladesh
|
9.90 | 2024 |
 Seychelles
|
9.80 | 2024 |
 India
|
9.77 | July 2025 |
 Zambia
|
9.50 | 2020 |
 Albania
|
9.49 | May 2025 |
 Vietnam
|
9.30 | 2023 |
 Nicaragua
|
9.10 | July 2025 |
 Mauritius
|
9.00 | June 2025 |
 Moldova
|
8.90 | 2024 |
 Indonesia
|
8.80 | 2024 |
 Romania
|
8.80 | 2024 |
 Chile
|
8.71 | July 2025 |
 Pakistan
|
8.70 | 2021 |
 United Kingdom
|
8.61 | June 2025 |
 Vanuatu
|
8.60 | 2024 |
 Samoa
|
8.40 | 2024 |
 Belize
|
8.40 | 2024 |
 Guyana
|
8.40 | 2024 |
 Papua New Guinea
|
8.30 | 2023 |
 Jordan
|
8.17 | June 2025 |
 Bolivia
|
8.16 | June 2025 |
 Sri Lanka
|
8.10 | July 2025 |
 Algeria
|
8.00 | 2024 |
 Comoros
|
8.00 | 2022 |
 Cape Verde
|
7.80 | 2024 |
 Tonga
|
7.80 | 2024 |
 Trinidad and Tobago
|
7.50 | 2024 |
 Hungary
|
7.50 | June 2025 |
 United States
|
7.50 | July 2025 |
 Costa Rica
|
7.30 | 2024 |
 St. Vincent and the Grenadines
|
7.10 | 2024 |
 Finland
|
6.96 | June 2025 |
 Grenada
|
6.90 | 2024 |
 Panama
|
6.90 | 2022 |
 Montenegro
|
6.60 | 2024 |
 Antigua and Barbuda
|
6.50 | 2024 |
 Saint Kitts and Nevis
|
6.50 | 2024 |
 Thailand
|
6.35 | July 2025 |
 Saint Lucia
|
6.30 | 2024 |
 Benin
|
6.30 | 2021 |
 Burkina Faso
|
6.30 | 2021 |
 Qatar
|
6.20 | 2024 |
 Norway
|
6.10 | 2024 |
 Botswana
|
6.01 | May 2025 |
 Macau
|
6.00 | 2024 |
 North Macedonia
|
5.90 | 2024 |
 Dominica
|
5.80 | 2024 |
 Aruba
|
5.80 | 2023 |
 Palestine
|
5.60 | 2021 |
 Oman
|
5.50 | 2021 |
 Brunei
|
5.50 | 2024 |
 San Marino
|
5.50 | 2024 |
 Latvia
|
5.41 | June 2025 |
 Singapore
|
5.30 | 2021 |
 Hong Kong
|
5.25 | July 2025 |
 Estonia
|
5.20 | June 2025 |
 Solomon Islands
|
5.20 | 2021 |
 Kuwait
|
5.06 | June 2025 |
 Canada
|
4.95 | July 2025 |
 Bahrain
|
4.94 | June 2025 |
 Malaysia
|
4.89 | June 2025 |
 Czech Republic
|
4.70 | 2024 |
 Fiji
|
4.60 | 2024 |
 Bulgaria
|
4.60 | 2024 |
 Croatia
|
4.55 | June 2025 |
 Bosnia and Herzegovina
|
4.50 | 2024 |
 Malta
|
4.47 | June 2025 |
 Greece
|
4.39 | June 2025 |
 China
|
4.35 | August 2025 |
 Italy
|
4.11 | June 2025 |
 South Korea
|
4.09 | June 2025 |
 Slovakia
|
4.06 | June 2025 |
 Austria
|
4.01 | June 2025 |
 Barbados
|
4.00 | July 2025 |
 Germany
|
4.00 | June 2025 |
 Portugal
|
3.73 | June 2025 |
 France
|
3.65 | June 2025 |
 Slovenia
|
3.53 | June 2025 |
 Belgium
|
3.52 | June 2025 |
 Luxembourg
|
3.45 | June 2025 |
 Taiwan
|
3.26 | July 2025 |
 Switzerland
|
3.00 | 2024 |
 Israel
|
3.00 | 2022 |
 Netherlands
|
2.47 | June 2025 |
 Japan
|
2.20 | July 2025 |
 Spain
|
2.18 | June 2025 |
 Denmark
|
1.75 | July 2025 |
 Peru
|
0.81 | July 2025 |
See also
[edit]References
[edit]- ^ Thomas, L., Money, Banking and Financial Markets (Mason, OH: Thomson South-Western, 2006), p. 8.
- ^ According to data published by The Wall Street Journal Online and the Federal Reserve Board of Governors. "Federal Reserve Statistical Data". Federal Reserve.
- ^ According to data published by The Wall Street Journal Online and the Bank of Canada. "Daily Digest- Rates and Statistics- Bank of Canada". Bank of Canada.
- ^ Ho, Fiona (January 6, 2015). "Base Rate vs BLR in Malaysia: How Does BR Work?". iMoney.my. Retrieved January 26, 2015.
- ^ "Maybank sets base rate at 3.2%". The Sun Daily. January 5, 2015. Retrieved January 26, 2015.
- ^ Ho, Fiona (January 6, 2015). "Base Rate vs BLR in Malaysia: How Does BR Work?". iMoney.my. Retrieved January 26, 2015.
- ^ "World Bank Open Data". World Bank Open Data. Retrieved 2025-08-26.