LIBOR Chart

From LoveToKnow Mortgage

Checking a LIBOR chart is a quick way to see the ups and downs of the interest rate market and to potentially determine the interest rate of an adjustable rate mortgage or credit card. Learn how the numbers are developed and the best sources for finding LIBOR data.

LIBOR charts track the current wholesale interest rates.

LIBOR Explained

LIBOR, the London Interbank Offered Rate, is the average interest rate which a pre-selected group of banks in England would charge when they loan money to other banks. The selected banks are healthy, well-funded banks. The LIBOR inter-bank average is similar to the Prime rate, the inter-bank average of United States banking institutions. The LIBOR rate is typically lower than the Prime rate.

LIBOR rates are used by lenders worldwide as a basis on which to determine the interest rate they will charge for different loan maturities. LIBOR rates are compiled for fifteen specific maturities:

Overnight
1 week
2 weeks
1 month
2 month
3 month
4 month
5 month
6 month
7 month
8 month
9 month
10 month
11 month
12 month

LIBOR rates are used to determine interest rates on many types of loan and credit products such as credit cards, adjustable rate mortgages and business loans. Typically, the interest rate on an adjustable rate mortgage is set based on a combination of the LIBOR rate plus a margin of some pre-agreed percentage. The rates are often set based on the 6-month LIBOR rate plus the margin. However, some adjustable rate mortgages are based on shorter maturities such as the 1-month and 3-month rate or the longer 1-year rate.

Most credit card interest rates are based on the Prime rate; however, some are based on the LIBOR rate. Credit cards using the LIBOR rate will usually base their rates on the 6-month LIBOR rate. Credit cards do not typically add a margin to the LIBOR rate when determining the interest rate which will be charged to the cardholder.

Compiling the Rates

As many as sixteen English banks submit each of the interest rates they would charge other banks to borrow money for maturities from overnight to 12 months. They submit the interest rates every business day to the British Bankers Association, commonly called the BBA. The BBA is responsible for determining the average interest rate for each maturity period. These average interest rates are called the LIBOR rates.

Every business day at 11 a.m. Greenwich Mean Time (London time) the BBA determines the LIBOR rates for that specific day. The rates are initially calculated in Eurodollars. To enable the LIBOR rates to be used globally, they are also calculated in a variety of currencies including:

Pound Sterling
United States Dollar
Japanese Yen
Swiss Franc
Canadian Dollar
Australian Dollar
Swedish Krona
Danish Krone
New Zealand Dollar

Distributing the Libor Chart

After determining the various rates for the various maturities, the BBA compiles the rates into a chart format – the LIBOR chart. The chart is distributed internationally the same day as it is developed using major business data suppliers such as:

Reuters
Thomson Financial
Bloomberg
Quick
Infotec
Class Editori
IDC
Proquote
Telekurs
MoneylineTelerate

Many business and financial publications print all or part of the LIBOR chart for the prior day in their publications. For example, in the United States, LIBOR rates can be found in Financial Times and the Wall Street Journal.

Some financial websites, including bankrate.com and wsj.com, are licensed to publish the current LIBOR rates at the end of London's business day. All maturities of the current and historical LIBOR rates can always be found on the BBA website.

More Information on LIBOR Rates

If you are looking for more detailed information or you need to find historical rates or forecasts on future rates, LovetoKnow Mortgage provides a wide range of information on LIBOR rates in these articles:

Explaining LIBOR:

Understanding LIBOR rates:

Obtaining historical LIBOR rates:

Obtaining current LIBOR rates: