Libor

daylad

Hi, what effects will the change to the way the LIBOR rate is calculated in September have on my mortgage? My mortgage is tracked on the LIBOR rate, thanks

dunstonh

Do you actually have a LIBOR tracker or do you mean your lender uses LIBOR as one of the primary indicators for setting it's mortgage rates?

daylad

hi, my lender uses LIBOR to set its rates, it changes every 3 months

opinions4u

Until the changes are confirmed, who knows?

I suspect it will be somewhere between very little and nothing.

jamesd

There's no way to know yet. We don't even know how it'll finally be done, though the proposal is to use market rates. That could make it extremely volatile in times of financial stress when there may be limited or no trading in the markets. Under the current system banks are to report what they think they would have been able to borrow at in that situation.

dunstonh

hi, my lender uses LIBOR to set its rates, it changes every 3 months

So your mortgage does not track LIBOR. The lender is influenced by it (amongst other things). It will be influenced by its replacement.

Jimbo1976

Who is your mortgage with? If it is a specialist lender then it may well track 3-month LIBOR and your lender updates this every 3 months.

Whatever happens to LIBOR in the future, there will need to be some kind of reference rate for existing loans which track LIBOR and there will be a lot of work put in to ensure no existing parties are adversely affected. I wouldn't worry about it, it is nothing you can control or impact.