tiwala619, when he says "tied to," he means that lenders set their loan interest rates based upon the LIBOR index, plus a margin. Therefore the loan interest rate is directly corralated to the LIBOR rate. More specifically, and most commonly, the 1-month, 3-month, 6-month, and 1-year LIBOR maturities.
FYI, he mentioned adjustable rate mortgages but he did not mention that many other loans are also tied to LIBOR, such student loans, business loans, and lines of credit.
tiwala619, when he says "tied to," he means that lenders set their loan interest rates based upon the LIBOR index, plus a margin. Therefore the loan interest rate is directly corralated to the LIBOR rate. More specifically, and most commonly, the 1-month, 3-month, 6-month, and 1-year LIBOR maturities.
FYI, he mentioned adjustable rate mortgages but he did not mention that many other loans are also tied to LIBOR, such student loans, business loans, and lines of credit.
liborateddotcom 1 year ago