The Libor Index and Adjustable Rate Mortgages
Posted by Calum and Kathleen MacKenzie on Monday, December 21st, 2009 at 2:09pm.If you have an adjustable rate mortgage (ARM) that is indexed to the Libor, the London interbank offered rate, there is a good article in today’s Wall Street Journal. In a nutshell the article explains why despite a cut in short term rates by the Federal Reserve and similar efforts by central banks in Europe and Asia, the Libor continues to go higher. Many adjustable rate mortgages here in the U.S. are indexed to the Libor, so if you’ve been reading about the Fed cutting interest rates and thinking you might see a drop in your interest rate, you may want to check the index on your ARM.
Read the Wall Street Journal Why Libor Defies Gravity.
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