## Real prime lending rate

The interest rate will float at 1.25 percent over the prime lending rate on the construction loan and then will convert into a permanent loan at certificate of occupancy at either 2.25 percent over the five-year Treasury issue or at 2.5 percent over the 10-year Treasury issue. The prime interest rate—which the Wall Street Journal publishes—plays an important role in determining the lending rates that many banks and other lenders charge for consumer loan products. As The Prime rate is the most common indicator of market rates. The Prime rate is currently 4.75 today, and banks generally have rates of Prime +1.50 to Prime +3.50 (that equals rates of 7.00 percent to 9.00 percent) on commercial real estate loans. For example, a loan based on a prime rate of 2.5 percent and a profit margin of 2.5 percent would have an overall interest rate of 5 percent for the consumer. If the prime rate drops to 1.5 percent “The prime lending rate (currently 10.25%) is basically a marked-up version of the repo rate that banks use as a starting point to calculate interest rates for specific clients,” said Clarke. An amount paid to the lender, typically at closing, in order to lower the interest rate. Also known as mortgage points or discount points. One point equals one percent of the loan amount (for example, 2 points on a $100,000 mortgage would equal $2,000).

## The prime rate will move up or down in lock step with changes by the Federal Reserve Board. How it's used: The prime rate is an important index used by banks to set rates on many consumer loan

The interest rate will float at 1.25 percent over the prime lending rate on the construction loan and then will convert into a permanent loan at certificate of occupancy at either 2.25 percent over the five-year Treasury issue or at 2.5 percent over the 10-year Treasury issue. The prime interest rate—which the Wall Street Journal publishes—plays an important role in determining the lending rates that many banks and other lenders charge for consumer loan products. As The Prime rate is the most common indicator of market rates. The Prime rate is currently 4.75 today, and banks generally have rates of Prime +1.50 to Prime +3.50 (that equals rates of 7.00 percent to 9.00 percent) on commercial real estate loans. For example, a loan based on a prime rate of 2.5 percent and a profit margin of 2.5 percent would have an overall interest rate of 5 percent for the consumer. If the prime rate drops to 1.5 percent “The prime lending rate (currently 10.25%) is basically a marked-up version of the repo rate that banks use as a starting point to calculate interest rates for specific clients,” said Clarke. An amount paid to the lender, typically at closing, in order to lower the interest rate. Also known as mortgage points or discount points. One point equals one percent of the loan amount (for example, 2 points on a $100,000 mortgage would equal $2,000). Providers of consumer and commercial loan products often use the U.S. Prime Interest Rate as their base lending rate, then add a margin (profit) based primarily on the amount of risk associated with a loan.

### The interest rate will float at 1.25 percent over the prime lending rate on the construction loan and then will convert into a permanent loan at certificate of occupancy at either 2.25 percent over the five-year Treasury issue or at 2.5 percent over the 10-year Treasury issue.

The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Many small business loans are also indexed to the Prime rate.

### “The prime lending rate (currently 10.25%) is basically a marked-up version of the repo rate that banks use as a starting point to calculate interest rates for specific clients,” said Clarke.

The prime interest rate—which the Wall Street Journal publishes—plays an important role in determining the lending rates that many banks and other lenders charge for consumer loan products. As The Prime rate is the most common indicator of market rates. The Prime rate is currently 4.75 today, and banks generally have rates of Prime +1.50 to Prime +3.50 (that equals rates of 7.00 percent to 9.00 percent) on commercial real estate loans.

## An amount paid to the lender, typically at closing, in order to lower the interest rate. Also known as mortgage points or discount points. One point equals one percent of the loan amount (for example, 2 points on a $100,000 mortgage would equal $2,000).

“The prime lending rate (currently 10.25%) is basically a marked-up version of the repo rate that banks use as a starting point to calculate interest rates for specific clients,” said Clarke. An amount paid to the lender, typically at closing, in order to lower the interest rate. Also known as mortgage points or discount points. One point equals one percent of the loan amount (for example, 2 points on a $100,000 mortgage would equal $2,000).

The prime interest rate—which the Wall Street Journal publishes—plays an important role in determining the lending rates that many banks and other lenders charge for consumer loan products. As