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LIBOR linked mortgages
martin242
Posts: 1 Newbie
Following the first conviction for fixing LIBOR rates, are there any implications for the millions of mortgages whose rates were linked to LIBOR? If interest rates were being manipulated were we all paying too much interest? I would love to hear MSE views and anyone elses.
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Comments
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No. It was the other way round.
Borrowers actually benefitted from lower rates as it was a case of illegal suppression, not inflation.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Following the first conviction for fixing LIBOR rates, are there any implications for the millions of mortgages whose rates were linked to LIBOR? If interest rates were being manipulated were we all paying too much interest? I would love to hear MSE views and anyone elses.
Maybe those with Libor linked mortgages who have benefited should go find a banker to hug? Maybe offer to buy them a coffee too.0 -
They have now taken setting of these rates from the Bank of England and they are now set on a recognised exchange called the Inter Continental Exchange so they can fiddle these again. Those lovely bankers! One of them did get 13 years in prison last week though so not all bad.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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expatsmortgages wrote: »They have now taken setting of these rates from the Bank of England and they are now set on a recognised exchange called the Inter Continental Exchange so they can fiddle these again. Those lovely bankers! One of them did get 13 years in prison last week though so not all bad.
The Bank of England never set LIBOR. It was administered by the British Bankers Association, which is quite a different organisation.
P.S. And it was 14 years, not 13.0 -
kingstreet wrote: »No. It was the other way round.
Borrowers actually benefitted from lower rates as it was a case of illegal suppression, not inflation.
At various times it seems that LIBOR was fiddled both upwards and downwards.
More to the point, when we are talking about 'fixing' the rate, you are talking about maninpulating (say) the one year sterling rate from 1.07275 to 1.07000. If you are bank and are talking about a few billion quid, that little difference can mean a lot. But if you are a private individual, you'd have to have a pretty big mortgage for that difference to even amount to a £10 a year.0
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