The LIBOR or London Interbank Offered Rate is a benchmark interest rate which major global banks lend to one another in the international interbank market for short-term loans. It is administered by the Intercontinental Exchange which would use estimates from these major world banks to calculate the rate. It was based on five different currencies including the US dollar, Euro, Swiss franc, Japanese Yen, and British pound. It serves seven different maturities, overnight, spot, one, two, three, six and twelve months. Due to manipulations and fraud concerns over the years, it was decided at the end of 2021 to discontinue use of this benchmark for many major mortgage loan products. In turn, the SOFR or Secured Overnight Financing Rate essentially replaced the LIBOR at this time and became the new go to benchmark. I’m Stewart Brown, a licensed Mortgage Loan Originator in Palm Springs, California here to simply topics in Real Estate and Mortgage Lending. Please, like, share, follow and subscribe!
