What is the current Prime Rate?

The Current Prime Rate = 6.75%*

*As of: January 26, 2025. Source: https://www.wsj.com/market-data/bonds 

What is the Prime Rate?

The Prime Rate is an interest rate that many banks use as a basis or “index” to set rates for different types of loans, credit cards and lines of credit. It is influenced by the Federal Funds Rate, which is set by the Federal Reserve, and typically changes shortly after the Federal Reserve adjusts its own target rate. The actual rate is published in the Wall Street Journal, and is considered a indicators of current loan pricing conditions.

Why does the Prime Rate matter?

The Prime Rate directly affects the cost of certain types of credit, especially open-ended or revolving loans with variable interest rates. When the Prime Rate rises, the interest rates tied to it typically rise too. When it falls, borrowing becomes more affordable.

At Leader Bank, Home Equity Lines of Credit (HELOCs) and certain commercial loans and lines of credit can be tied to the Prime Rate. That means changes in the Prime Rate may impact your monthly payments or borrowing costs over time.

How does the Prime Rate impact my HELOC?

HELOCs and Other Variable‑Rate Loans

Many HELOC products use the Prime Rate as their base index. Your rate is typically calculated as:

Prime Rate + Margin = Your HELOC Interest Rate

As the Prime Rate changes:

• Your monthly payment may increase if the Prime Rate goes up.
• Your monthly payment may decrease if the Prime Rate goes down.

This makes understanding and monitoring the Prime Rate an important part of planning your home‑equity borrowing strategy.

When does the Prime Rate change?

Federal Reserve meetings—generally held every six to eight weeks—often lead to rate adjustments. While these changes are not guaranteed, a change to the Federal Funds rate usually – but does not always – result in a corresponding change in the Prime Rate.

Does a Prime Rate change effect mortgage rates?

Not necessarily. Changes in the prime rate don’t necessarily affect mortgage rates because the prime rate primarily influences short‑term credit products like HELOCs, credit cards, and auto loans, not long‑term fixed‑rate mortgages. Mortgage rates are determined by a range of broad economic factors but can also in part be influenced by the personal financial circumstances of each borrower. While broad economic and personal finance factors can still impact mortgage rates, rate shopping with different lenders will likely lead to some variance in the rate quotes you receive. This can benefit the borrower as lenders may compete with one another to offer you the most lucrative rate.

2026 Fed Meetings

• January 27-28 
• March 17-18*
• April 28-29
• June 16-17*
• July 28-29
• September 15-16*
• October 27-28
• December 8-9*

* Meeting associated with a Summary of Economic Projections.
 

Historical Prime Rates

Below is a record of four most recently published Prime Rates and the dates they became effective:

Stay Informed

Keeping track of the Prime Rate can help you make smart borrowing decisions, especially if you have, or are considering, a HELOC.

If you’d like help understanding how a rate change affects your specific loan or financial goals, our team is here to assist.