LIBOR

Sam · Posted: Wed Apr 07, 2004 2:38 am Post subject: LIBOR

The term LIBOR or the London Inter Bank Offering Rates is simply an average of the interest rates on dollar deposits traded between the banks situated in London. In other words it is the rate of interest at which the banks borrow funds from other banks situated in the London money market.

It is an international index which generally follows the economic condition of the world. The advantage of LIBOR is that allows international investors to compare their cost of fund with their cost of lending.

This rate is close in comparison to 1 year CMT or Constant Maturity Treasuries and is much more sensitive to wide fluctuations in the economy than COFI. There are several different types of LIBOR rates which are used to a great extent as ARM indexes like 1 month, 3 month, and 6 month. Out of this 6 month LIBOR is the most common in use.

One of the benefits of LIBOR indexed ARMs is that it allows the borrowers with very low initial rates in comparison to other ARMs. As a result it has proved itself as a competitive rate in comparison to popular rates like COFI, 6-month treasury bills, and 6-month certificate of deposits. Besides this, with the LIBOR ARMs the borrowers are generally protected from wide interest rate fluctuation because of periodic and lifetime interest rate caps. In addition this rate do not suffer from negative amortization.

Related Article

ARM Indexes determining the rate on ARMs

Jessica · Posted: Wed Dec 07, 2005 8:57 pm Post subject: 1 Year LIBOR index

1 year LIBOR Index for last 10 months have been given below:

Period	1 Mth LIBOR	3 Mths LIBOR	6 Mths LIBOR	1year LIBOR
Jul, 05	3.5107	3.6948	3.9235	4.1745
Aug, 05	3.6942	3.8720	4.0817	4.3123
Sep, 05	3.8584	4.0551	4.2154	4.4067
Oct, 05	4.0082	4.2523	4.4467	4.6765
Nov, 05	4.2954	4.4139	4.5795	4.7379
Dec, 05	4.3857	4.5298	4.6901	4.8226
Jan, 06	4.5700	4.6700	4.8100	4.9400
Feb, 06	4.6300	4.8200	4.9900	5.1500
Mar, 06	4.8300	4.9900	5.1200	5.2500
Apr, 06	5.0200	5.1500	5.2900	5.4200
May, 06	5.1071	5.2335	5.3215	5.4139
Jun, 06	5.3451	5.5085	5.6382	5.7660

All times are GMT - 7 Hours

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