In this video, I explain how the prime rate affects borrowers and the types of loans that can be influenced by it. The prime rate determines the interest rate on personal and residential loans like mortgages and credit cards. Borrowers usually receive a rate of prime plus a spread, which can vary based on factors like credit score and debt to income ratio. I also discuss fixed rate loans versus variable rate loans, highlighting how changes in the prime rate can affect the interest paid.
YOUTUBE VIDEO: Understanding the Impact of Prime Rate on Borrowers
On