What are Current Libor Rates?

LIBOR, or the London Interbank Offered Rate, is a reference rate based on the interest rates charged from banks when they apply for loans from other banks in the London money market. The LIBOR rate is used as a benchmark by banks across the world for setting short-term interest rates. Similar to other reference indexes, LIBOR is subject to adjustments on a frequent basis, making it essential for bankers and borrowers to continuously update their knowledge of the current LIBOR rates.

LIBOR, or the London Interbank Offered Rate, is a reference rate based on the interest rates charged from banks when they apply for loans from other banks in the London money market. The LIBOR rate is used as a benchmark by banks across the world for setting short-term interest rates. Similar to other reference indexes, LIBOR is subject to adjustments on a frequent basis, making it essential for bankers and borrowers to continuously update their knowledge of the current LIBOR rates.

Several financial instruments, such as short term futures contracts, variable rate mortgages and floating rate loans, have a direct impact on the LIBOR rates. Moreover, activities related to foreign currencies, especially the US dollar and the Euro, also play an important role in determining the LIBOR rates on a daily basis.

Why is Knowledge of Current LIBOR Rates Important?

Often financial institutions offering loans based on the current LIBOR rate apply higher interest rates. This is because most financial institutions add their margins to the index rates, typically including margins of one to two percentage points. For example, if the current LIBOR rate is 3.5% and a bank includes a margin of 2%, you will have to bear a 5. 5% interest rate on the loan you take from the bank. Thus, it is better to know both the current LIBOR rates and the margins charged by your banker.

How to Find Current LIBOR Rates?

There are several sources from where you can find out current LIBOR rates. These include:

1. Directly from financial institutions: You can approach your banker to know the current LIBOR rate. Although not all lenders are using LIBOR as their reference rate, the rising popularity of this index has prompted more and more lenders to add this product to their portfolio.

2. From various websites: There are numerous websites that offer a minute-by-minute update on LIBOR rates. Some sites even offer its members the facility to receive an email notification whenever the LIBOR rate changes. You can also compare various national lenders who offer loans based on current LIBOR rates to find the best deal available in your country. Some of the sites that offer current LIBOR rates are BankRate.com, PrimeRate.com and Bloomberg.com. While BankRate.com offers interest rate comparisons for mortgage lenders, PrimeRate.com provides historical data in addition to the current LIBOR rates. Bloomberg.com offers comprehensive historical graphs of interest rate data. Moreover, all three sites provide extensive information and links to the websites of various financial institutions.