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What is the one-year Libor rate?

 

What is the one-year Libor rate?

(The Bankrate.com financial term of the day is:) "One-year Libor rate."

This is the interest rate that banks in London charge each other for one-year loans. Libor stands for London Interbank Offered Rate. Why the heck should you care what banks in London are doing? Because the rate is an important benchmark. In the U.S., it helps determine your new rate when it's time for your adjustable-rate mortgage, or ARM, to reset.

When you have an ARM pinned to the one-year Libor rate, it's not a chokehold. It means your rate will move up or down depending on what that interest rate on the other side of "the pond" is doing.

To find the best rates on adjustable rate mortgages and other mortgage products, visit the Mortgage tab at Bankrate.com.

 

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Mortgage Overnight Averages
Product Rate +/- Last week
30 yr fixed mtg
3.67% 3.62%
15 yr fixed mtg
2.80% 2.76%
5/1 ARM
2.60% 2.58%
30 yr fixed mtg refi
3.65% 3.61%
View rates in your area:
 

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