Good news for HELOC borrowers – thanks to an emergency federal rate cut, your home equity bill may be getting smaller. Today, the government slashed the federal funds rate by half a percentage point.
The New York Times reports:
“The Fed said in a statement that, because of weakening economic activity, it had cut the Federal funds target rate by half a percentage point, to 1.5 percent. It also cut its discount rate by the same amount. The vote was unanimous…
Federal Reserve officials said Wednesday’s action was the first time ever that the Fed had coordinated a reduction in interest rates with other central banks, though the United States has periodically joined with other countries to intervene in currency markets to stabilize foreign exchange rates.”
Major banks including National City, Wells Fargo, and Wachovia followed suit by lowering their prime lending rates to 4.5%. The prime rate is the rate that is given to the most credit worthy borrowers.
For more information on how this may affect you see: Will Federal Rate Cuts Affect Your HELOC APR?