January 06, 2010 - Today's US Prime Rate is 3.25%

What is the Prime Rate?

The prime rate is quite consistent among the major banks however a few may differ depending on internal policies. The prime rate does not adjust on an regular basis however when it does financial institutions tend to adjust their rates at the same time.

Prime Rate vs. LIBOR

The prime rate is popular but another interest historically common to only commercial loans has become popular in consumer lending the past decade. LIBOR stands for "London Inter-Bank Offered Rate." The LIBOR index is based on rates that contributor banks in London offer each other for inter-bank deposits. In relation to home loan lending LIBOR is commonly used as an index for adjustable rate mortgages (such as interest only loans) and commercial loans. Although many LIBOR rates are published most US loans are based on the LIBOR rates published in the Wall Street Journal (i.e. one month, one year and six month LIBOR rates) - Learn more about LIBOR here >>

Prime Rate History

The US prime rate has changed many times since its introduction decades ago. View the prime rate history and learn about how and who decides a prime rate change is in order

Changes in the Prime Rate Affect you how ...

Changes in the Prime Rate affect the cost of borrowing for many consumers including both personal and business consumers. With any change in the prime rate the debt service cost of borrowed money can substantial increase or decrease depending on the amount of change in the prime interest rate.

The greatest impact of changes in the prime rate within the residential mortgage lending sector is the cost of money for payments on Home Equity Lines. Most home equity lines have interest rates tied to the prime rate (ex. Prime + one) so its possible to see a 0.5% or full 1.0% change in your rate within a relatively short period of time. For consumers that do not carry a loan balance this sometimes does not have a sweeping effect however homeowners with large credit lines can often see a couple hundred dollar change in the payment once the mortgage lender adjust the line according to the terms of the note. 

Corporate lending is rather a different breed as small business owners typically have limited access to financing and often work on very small margins while building their business so a $200 or $300 change in the payment can either greatly help or hurt the business cash flow. using variable interest financing can have its advantages as interest rates certainly are lower now than ever before but the old expression "what come up must go down" is in play here.

The most important thing any small business owner or homeowner should consider right now is to always explore fixed rates when seeking a loan. Although short term you may save money with a variable rate we are in a historically low market when it comes to interest rates and there really is no where to go but up.

Learn more about Consumers and the Prime Rate >>

Prime Rate History

The US prime rate has changed many times since its introduction decades ago. View the prime rate history and learn about how and who decides a prime rate change is in order.

View Prime Rate History >>

Buying a Home

Buying a home and interested in home loan financing. Learn some common ways people finance their homes and get mortgage rates from LOCAL mortgage lenders by ZIP Code - all 50 States.

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Refinance a Loan

Cash Out. Debt Consolidation. Home Improvement. These are the top three (3) reasons people refinance however finding a good rate can be difficult in this market. Learn about mortgage refinancing here

Refinance Options >>