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Current Prime Rate
Prime Rate Update

7.75% – Effective as of: November 18, 2022

What is Prime Rate?

The Prime Rate is the interest rate that banks use as a basis to set rates for different types of loans, credit cards and lines of credit. Certain mortgage rates, like variable rate mortgages, home equity loans and home equity lines of credit, may also be affected by the published rate.

Each bank sets its own Prime Rate. For example, for consumer products, Commerce Bank uses the U.S. Prime Rate published in The Wall Street Journal    in its column called "Money Rates," and this is the rate shown above. The rate published in The Wall Street Journal is based on the Federal Reserve’s federal funds rate. The U.S. Prime Rate is not always the lowest, the best or the favored rate of interest. Banks use different methods to determine what is the applicable rate of each product and when adjustments will be made. Please see your Commerce Banker for more information.

This rate can affect many areas of your life, including credit card interest rates, small business loans, mortgages and personal loans. It serves as a baseline that most banks use to determine what interest rate to give customers who want to either open a new credit card or take out a home loan. To determine the rate, commercial banks take the federal funds rate, or the interest rate set by the Federal Reserve that banks use to borrow from one another, and adds about 3% as a guideline. Following updates of this rate will help you make important decisions such as what type of loan or mortgage to choose, or even what APR you should be looking for when opening a new credit card.
Typically, the Federal Reserve meets around six times a year to discuss the federal funds rate. They may decide to decrease or increase it based off the economy’s current state and future projection path. However, they may meet more frequently if the economy is experiencing periods of stress such as a recession. From this meeting the Federal Reserve announces their change to the federal funds rate and commercial banks adjust their interest rates to follow the Federal Reserve’s decision. Because of the frequency of changes in the rate and its influence over loans, credit cards and mortgages, it’s important to routinely check for updates.

Since the rate is used by most banks as the baseline interest rate, any increases or decreases will cause your adjustable-rate mortgage payments to fluctuate with it. Any new loan applications will also be affected to reflect the new loan rate. After times of high mortgage rates, if the rates decrease, some homeowners choose to refinance their loans to receive a lower rate.

Historical Prime Rates:

2023

  • 7.75% – Effective as of: 02/02/2023

2022

  • 7.50%   Effective as of: 12/15/2022
  • 7.00% – Effective as of: 11/03/2022
  • 6.25% – Effective as of: 09/22/2022
  • 5.50% – Effective as of: 07/28/2022
  • 4.75% – Effective as of: 06/16/2022
  • 4.00% – Effective as of: 05/05/2022
  • 3.50% – Effective as of: 03/17/2022

2020

  • 3.25% – Effective as of: 03/17/2020
  • 4.25% – Effective as of: 03/04/2020

2019

  • 4.75% – Effective as of: 10/31/2019
  • 5.00% – Effective as of: 09/19/2019
  • 5.25% – Effective as of: 08/01/2019

2018

  • 5.50% – Effective as of: 12/20/2018
  • 5.25% – Effective as of: 09/27/2018
  • 5.00% – Effective as of: 06/14/2018
  • 4.75% – Effective as of: 03/22/2018

2017

  • 4.50% – Effective as of: 12/14/2017
  • 4.25% – Effective as of: 06/15/2017
  • 4.00% – Effective as of: 03/16/2017

2016

  • 3.75% – Effective as of: 12/15/2016

2015

  • 3.50% – Effective as of: 12/17/2015

2008

  • 3.25% – Effective as of: 12/18/2008
  • 4.00% – Effective as of: 10/31/2008
  • 4.50% – Effective as of: 10/09/2008
  • 5.00% – Effective as of: 04/30/2008
  • 5.25% – Effective as of: 03/19/2008
  • 6.00% – Effective as of: 01/31/2008
  • 6.50% – Effective as of: 01/23/2008

2007

  • 7.25% – Effective as of: 12/12/2007
  • 7.50% – Effective as of: 11/01/2007
  • 7.75% – Effective as of: 09/19/2007

2006

  • 8.25% – Effective as of: 06/30/2006
  • 8.00% – Effective as of: 06/01/2006
  • 7.75% – Effective as of: 03/29/2006
  • 7.50% – Effective as of: 02/01/2006
This history shows each Prime Rate change since the date shown.