Earlier today, the Federal Reserve slashed the federal funds interest rates by 3/4 of a percentage point. This has been the 6th rate cut in the past 6 months.

The New York Times Reports:

“Though it was one of the biggest one-day rate cuts in decades, investors had been betting heavily that the Fed would cut its key rate a full percentage point in response to strong evidence that a recession has begun and to the deepening crisis on Wall Street…

Some saw the cut of three-quarters of a point as a compromise to appease those who wanted less. Others surmised that the Fed may have been reluctant to cut rates further immediately in part because as the rates inch closer to their floor of zero, the Fed leaves itself less room to maneuver in case of further financial shocks.”

If you have a HELOC based on the prime rate, this federal rate cut may end up reducing your monthly interest payments.

For those who can qualify with the tough new lending standards, now may be a good time to take out a home equity loan. If the New York Times article is any indication, more rate cuts may follow in the coming months.

See Also: Will Federal Rate Cuts Affect Your APR?

Tags | Heloc, mortgage rates