Wall Street Journal Prime Rate

The Prime Rate is the benchmark interest rate charged by banks to their most creditworthy corporate customers. The Wall Street Journal defines it as “The base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks”. Historically it has correlated quite closely with the actions of the Federal Reserve. That is, if the Fed increases its discount rate by ¼ %, banks will usually follow the Fed’s lead by increasing their prime lending rate by the same amount.

Over the last decade or so, the Prime Rate index has become more closely watched by the general masses. This is the result of an enormous number of property owners securing Home Equity Lines Of Credit (HELOC) and having the majority of these HELOCs use the Prime Rate as their base interest rate.

Below you will find a thirty year history of the Prime Rate. You might be surprised by its range.

Prime Rate history from 1980 to present.