Daily LIBOR Rates
From LoveToKnow Mortgage
Knowing daily LIBOR rates are important if you invest in mortgages based on this index. Investors should learn what the most up-to-date rate is since it changes so often.
Finding Daily LIBOR Rates
Daily rates can be found online, oftentimes updating more frequently than print ads. The current LIBOR rate is ever-changing, so any advertised ad for the current rate may be outdated quickly. Check the rate frequently online.
Bankrate.com has one of the most comprehensive opportunities to monitor LIBOR rates online. They provide one, three and six month and one year LIBOR rates updated at least weekly. They also compare these numbers to the same LIBOR rate in the previous month and the previous year.
Another option is to visit third party blogs and websites updated by investors such as DowJonesClose.com. This website posts the daily LIBOR rate]] as soon as the rate is published, usually in the mornings.
The Financial Times also provides data on LIBOR rates on a daily basis, as well as historical information.
Some websites are willing to give these rates on a daily basis, but they require a paid membership to receive them. For those who are investing in the markets, having this data may be a good option. In this situation, the British Bankers' Association is a good source for daily information.
In addition to these methods of obtaining daily rates, individuals can also contact financial institutions directly and request this information, especially in cases of mortgage investing.
More Sources for Finding the LIBOR Rate
It is important to keep in mind that the LIBOR rate is published on a daily basis, but that the rates published in newspapers and in ads may not be the most current information. Besides the sources already listed above, the British Bankers' Association also releases information to the following news groups:
Always check the publication date of any LIBOR rate to ensure its timeliness.
LIBOR Rate Details
The LIBOR rate is the London Interbank Offered Rate. The LIBOR is the rate banks charge each other to borrow money. It is an average of the rates charged by the highest ranked banks in the UK. The LIBOR rate is used internationally by a variety of lenders and investors as a way of making decisions. Lenders use the daily rate to determine what interest rates they will charge consumers. Investors use these rates to determine how to invest in mortgages.
The LIBOR rate is created on a daily basis in London. Each business day of the week, the British Bankers Association determines the rate at approximately 11 a.m. local time. This rate is formulated from the rates being offered by 16 contributor panel banks. Once determined, the rate is published so that other lenders and investors can utilize it. This is done usually by noon UK time.
To calculate the LIBOR rate, the British Bankers' Association looks at the middle 50 percent of the rates provided by the panel banks to determine an average. This process is then repeated 150 times for each of the 15 maturities and the 10 currencies the rate is quoted in. The maturities range from overnight rates to 12-month rates.
Changes in the LIBOR rate help to show short-term volatility in the market. The rate most often found in news releases is the overnight rate, which many investors use to determine short-term movement in the market. The use of longer-term rate quotes is seen as a more accurate view of the market by investors.
In particular, the LIBOR rate is used to understand how global markets are reacting to market conditions. This is why the rates can change on a daily basis. In 2008 and 2009, the daily LIBOR rates moved dramatically in the short term, which is an indication of the volatility in the market at that time.
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This page has been accessed 1,306 times. This page was last modified 03:44, 15 May 2009.
© 2006-2009 LoveToKnow Corp.
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