Canadian Agricultural Loans Regulations (SOR/99-122)

14 (1) The maximum rate of interest payable per annum by a borrower in respect of a loan is

• (a) if the rate of interest on the loan is not fixed, the prime lending rate of the lender plus 1%, as that prime rate is fixed daily during the term of the loan; and

• (b) if the rate of interest is fixed, the residential mortgage loan rate of the lender for a comparable term plus 1%, as that rate is fixed on the date the funds are disbursed or on an earlier date agreed to in writing by the lender and the borrower.

(2) If a loan with a fixed rate of interest is to be extended before the expiry of its term, the interest rate on the loan may be blended, merged or combined with the interest rate fixed on the day of extension for the balance of the proposed term in accordance with the lender’s current practice for that type of loan.