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United States 'Prime Rate'
The Prime Rate is set by the Federal Reserve and is used by banks to make short-term unsecured loans to customers in very good standing. Most interest rates are based on the Prime Rate, such as Home Equity rates, credit card rates, and even home mortgage rates.
When the Fed changes the Prime Rate, it is usually a very big deal. This is because it alters everything -- in a sense it changes the value of money in terms of borrowing. For example, if your home loan is at 6.5%, and the Federal Reserve lowers the Prime Rate to 5.75%, it is possible that you can get a new loan (refinance) at a lower interest rate because loan rates are based on the Prime Rate. Basically, this means that you may be able to borrow the money for less because the federal interest rates are now lower than they were when you first got your home loan.
Recent Prime Rate Changes
|Prime Rate History|
|Jan, 2009||3.25 %||Decrease|
|Nov, 2008||4.00 %||Decrease|
|Apr 30, 2008||5.00 %||Decrease|
|Mar 18, 2008||5.25 %||Decrease|
|Jan 30, 2008||6.00 %||Decrease|
|Jan 22, 2008||6.50 %||Decrease|
|Dec 11, 2007||7.25 %||Decrease|
|October 31, 2007||7.50 %||Decrease|
|September 18, 2007||7.75 %||Decrease|
|June 29, 2006||8.25 %||Increase|
|May 10, 2006||8.00 %||Increase|
|March 28, 2006||7.75 %||Increase|
|Jan 31, 2006||7.50 %||Increase|
|Dec 2005||7.25 %||Increase|
|Nov 2005||7.00 %||Increase|
|Sep 2005||6.75 %||Increase|