Libor Index Mortgage

A Libor Mortgage is short for the London InterBank Offered Rate, the interest rate offered for U.S. dollar deposits by a group of large London banks. There are actually several Libors corresponding to different deposit maturities. Rates are quoted for 1-month, 3-month, 6-month and 12-month deposits.

The LIBOR index is the most popular index that Adjustable Rate Mortgages are tied to. It is the most volatile index as it tends to followed by investors who have investments tied to that index.