Prime Rate Watch

On January 30th, 2008 prime rate has dropped to 6%, right after another very steep decrease from 7.25% down to 6.5%. This is a great news for a commercial mortgages industry as prime is one of the main indexes for interest rate pricing. This means that all the notes originated in 2006 and 2007 are now prime candidates for refinancing. And if property has 1 year seasoning even a cash out refinance will be an attractive option.

Interesting to note that prime was as low as 4% at the end of 2003 and then was going up until 7/2006 when it picked at 8.25%. Right now prime rate is at the level of 6/2005 and hopefully will continue it's fall.