Prejudgment and Postjudgment Interest in Ontario: How a Debt Grows
An Ontario money judgment carries two layers of interest, both set by the Courts of Justice Act: prejudgment interest, running from the date the cause of action arose to the date of the order, and postjudgment interest, running from the date of the order until the money is paid. For a proceeding commenced in 2026 the statutory prejudgment rate is 2.5%, and for an order made in 2026 the postjudgment rate is 4.0%. But those are only the defaults: where a contract sets the rate, as a credit card agreement does, the contract rate generally applies instead. Here is how the interest on an Ontario debt judgment is assembled, and where to check it.
The two rates, and where the numbers come from
Both rates track the Bank of Canada bank rate as it stood at the end of the first day of the last month of the preceding quarter (s. 127(1)). The prejudgment rate rounds that figure to the nearest tenth of a percentage point; the postjudgment rate rounds it up to the next whole number and adds 1%, which is why it is always higher.
Which quarter applies is then fixed: prejudgment interest uses the quarter the proceeding was commenced (the date the court issued the claim), postjudgment interest the quarter the order was made. The Ministry of the Attorney General publishes the table under s. 127(2), and on the version updated September 2, 2026, every quarter of 2026 shows 2.5% prejudgment and 4.0% postjudgment. Older files carry more — in 2024 the rates sat at 5.3% and 7.0% — so check the table against the quarter the claim was issued, not today’s.
Prejudgment interest: from when, and on what
Section 128(1) gives a person entitled to an order for the payment of money interest “calculated from the date the cause of action arose to the date of the order.” On a consumer debt that start date is normally tied to the breach or default, not to the date the creditor got around to suing — worth pinning down, since the same date generally starts the two-year clock that can make a debt too old to sue on.
Section 128(4) lists what prejudgment interest cannot touch: punitive damages, costs, losses arising after the order, advance payments, consent orders except by the debtor’s consent, interest accruing under the section itself — so statutory prejudgment interest does not compound — and, the exclusion that does the most work in debt files, any case where interest is payable by a right other than under this section (s. 128(4)(g)).
Postjudgment interest: what the running total is built on
Under s. 129(1), money owing under an order — including costs — bears interest at the postjudgment rate from the date of the order. The Ministry’s guidance confirms the effect: it runs on the amount ordered plus costs plus any prejudgment interest in the order. Prejudgment interest is fixed the moment the order is made; this figure keeps growing until payment. Where an order provides for periodic payments, each payment in default bears interest only from its own default date (s. 129(2)). Partial payments reduce the base, since interest is not charged on money already paid, though the rate stays fixed. Section 129(5) mirrors s. 128(4)(g).
When a contract rate replaces the statutory rate
This is where a modest-looking judgment becomes a large one. Sections 128(4)(g) and 129(5) both remove the statutory rate where interest is payable by another right, most often a written agreement. So on a credit card, line of credit or loan account, the annual rate in the agreement generally governs instead of 2.5% — and card rates run several times that.
There is a ceiling: under s. 347(2) of the Criminal Code a “criminal rate” is an effective annual rate exceeding 35% on the credit advanced, and agreeing to receive it is an offence.
How interest is claimed, and why the wording matters
Prejudgment interest is not automatic: if it is not asked for in the originating document, it does not go into the judgment. In the Small Claims Court an action starts by filing a Plaintiff’s Claim (Form 7A) under rule 7.01(1), and page 3 carries one interest block — prejudgment interest from a stated date, under either the Courts of Justice Act or “an agreement at the rate of ____ % per year,” with an instruction to check only one box. So the plaintiff must name a start date and pick one route, not both. Rule 7.01(2) adds that a claim based on a document must have a copy attached unless the claim explains why it is unavailable — and a claim relying on an agreement rate is a claim based on a document.
In the Superior Court the vehicle is the statement of claim, which under rule 25.06 must plead the material facts and specify the relief claimed. On default, rule 19.04 lets the registrar sign judgment for a debt “including interest if claimed in the statement of claim” — but the requisition must show how prejudgment interest is calculated, the registrar may decline if uncertain what rate is properly recoverable (r. 19.04(3)(b)), and a signed judgment carries postjudgment interest at the rate claimed (r. 19.04(5)). Small Claims rule 11.02(1) is the same.
The court’s discretion, and where to push back
Section 130 lets the court, where it considers it just, disallow interest under s. 128 or s. 129, allow it at a higher or lower rate, or allow it for a different period. It must weigh market interest rates, the circumstances of the case, any advance payment, the amount claimed against the amount recovered, and conduct that unnecessarily lengthened the proceeding. That last factor is the practical one: a creditor that sat on a file for years before suing is asking for interest over a delay it created.
The other checkable points are concrete: the rate claimed against the rate in the agreement, and whether the agreement was attached at all, which debt buyers frequently cannot do; the date interest runs from, since an early start date quietly inflates the total; and whether interest is being charged on interest. If a default judgment has been signed with the wrong rate, that rate keeps running until the judgment is varied or set aside.
Frequently asked questions
What is the current prejudgment interest rate in Ontario? For proceedings commenced in any quarter of 2026 it is 2.5%, and the postjudgment rate for 2026 orders is 4.0%, on the Ministry table updated September 2, 2026. What applies to you is the rate for the quarter your claim was issued.
Can a creditor claim my credit card rate instead of the statutory rate? Generally yes, where the agreement sets a rate: ss. 128(4)(g) and 129(5) displace the statutory rate where interest is payable by another right, and Form 7A asks the plaintiff to fill in that annual rate. The fair questions are whether the agreement says that, and whether it was attached as rule 7.01(2) requires.
Does postjudgment interest compound? Statutory interest is simple interest on the judgment, costs and any prejudgment interest in the order, and prejudgment interest cannot be charged on interest accruing under s. 128. A contractual rate may operate differently.
Check the number before you accept it
Interest is the easiest part of a claim to overstate and the easiest to check: a rate, a start date, and a balance that either matches the agreement or does not. If you have been sued for a debt in Ontario and the number does not look right, raise it while the claim is still live. Send us the claim and we will tell you what the interest should be, and whether the rest of it holds up.
Sources: Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 127–130 · Prejudgment and postjudgment interest rates, Ministry of the Attorney General · Rules of the Small Claims Court, O. Reg. 258/98, rr. 7.01, 11.02 · Plaintiff’s Claim, Form 7A (SCR 7.01-7A, August 1, 2022) · Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rr. 19.04, 25.06 · Criminal Code, R.S.C. 1985, c. C-46, s. 347. General information for Ontario, not legal advice.
General information for Ontario, not legal advice. Reviewed by Angelos Spingos. Last reviewed September 21, 2026.