LIBOR Mortgage Index
A Libor mortgage is an adjustable rate mortgage (ARM) on which the interest rate is tied to a specified London Inter Bank Offering Rate (LIBOR) - an average of the interest rate on dollar-denominated deposits, traded between banks in London. There are several different LIBOR rates widely used as ARM indexes: 1-, 3-, 6-Month, and 1-Year LIBOR. The 6-Month LIBOR is the most common.
Current rate can be found in the rate box on the right. >>
LIBOR ARMs offer borrowers aggressive initial rates (lower than many other ARMs) and has proved to be competitive with such popular ARM indexes as the 11th District Cost of Funds, the 6-Month Treasury Bill, and the 6-Month Certificate of Deposit.
After an initial period during which the rate is fixed, LIBOR mortgage is adjusted to the most recent value of the Libor index plus a margin.
Are you curious as to what your LIBOR-based mortgage rate and closing costs might be if you were to refinance or purchase a new home right now? You can run your numbers and get instant on-line estimates here: www.top-lenders.com. No contact information is required.