End of fixed rate - new variable LIBOR rate

ANY_CHANCE

I was hoping someone would be able to help me work out how much my new payments would be please.

My 2 year fixed rate mortgage ends 31/08/2009 so in October it will change to, in their words '2.8% above LIBOR.......which is usually on the 14th March, June, September and December.'

Does that mean it is linked to the 3 month LIBOR rate?

I pay 1121.74pm at the moment interest only at 6.79%

What should I expect my new payments to be?
There is no other information been given by JP Morgan Chase
all payments are up to date - no arrears

yelf

LIBOR is currently 0.937%. it stands for London Interbank Offered Rate and is the rate that the banks lend short term to each other - so you'll be paying a lot less

bgqs

This may help you....I as paying £810pm at 6.99% fixed. My fixed deal ends next month and I have received a letter advising that the new deal will be £515pm based on current LIBOR.

ANY_CHANCE

Thanks for the replies, i feel very lucky that the LIBOR rate has gone down i hate to think what i would have done if it had stayed the same or gone up. Although i realise that this will happen in the future at some point, i am counting on it not happening for a while yet so i can use the spare money to reduce debts.

ANY_CHANCE

What is this 3 month rate?
http://www.moneycafe.com/library/3monthlibor.htm

yelf

LIBOR is the 3mth loan period inbetween banks (so when you see libor it means 3mth libor)

ANY_CHANCE

Oh OK, so there is only one LIBOR that i need to be watching?
http://www.thisismoney.co.uk/libor

1121.74 / 6.79 = 165.20 (1%)
if i add 2.8% to LIBOR which is currently 0.937 = 3.737%

3.737% x 165.20 = £617.35 per month

Is that around what i should expect to be pay in October if the rate stays the same?