LIBOR rate continues to fall
13 November 2008
The wholesale cost of borrowing continued to fall this week, raising hopes that interest rates on loans and mortgages could fall in the near future.
Three-month sterling LIBOR (London Inter-Bank Offered Rate) – the rate at which banks lend to each other – fell to 4.37% this (Tuesday) morning, and is widely expected to fall further.
The LIBOR rate is a reflection of how expensive it is for lenders to borrow funds for loans and mortgages, and is often used to set rates for consumer lending.
A loans expert for Think Money said: “The LIBOR rate has been high compared with the base rate in recent months, but lenders have now started cutting interest rates after the most recent base rate cut.
“So far, some variable-rate mortgages have really benefited from interest rate cuts, but we hope that once the LIBOR rate falls closer to the base rate, loans will become cheaper across the board.”
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Tags: loans, mortgage, borrow, funds, rates
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