Small loans could see their interest rates drop to the lowest in four years, a move analysts said was a response to slowing growth in the housing market.
The Small Loan Rate Review Committee voted Thursday to lower the base rate on small loans from 6.25% to 5%.
The 5.25 percentage point increase is one of the most drastic reductions in rate increases in the country, the Small Loan Council of New York said in a statement.
The council said the rate cut was necessary to help stabilize the housing markets.
The rate cut would come into effect Jan. 1, 2019.
In December, the Federal Reserve said the economy was on track to grow 4.1% in the fourth quarter.
That was about half of the 6.8% growth expected.
The 5.50% base rate would be the lowest rate for small loans in more than 20 years.
It is the second-lowest rate in the world, behind only Japan, according to the Small Lending Institute.
The rate cut is one that would be supported by a large share of mortgage interest income, the council said.
The committee also voted to reduce interest rates on some loans that are backed by credit card debt, such as mortgages that have a fixed payment.
The rates would be 5.15% for these loans and 3.25%.
The 3.5% rate is currently the highest in the U.S. The credit card interest rate is 2.75%.
The committee voted to cut interest rates for these other types of loans.
The average rate for the smallest home loan is $2,000, the biggest is $7,400.
The average mortgage payment is about $250,000.
The median home price in the nation is about 2,000 times average annual household income.