The Libor and Adjustable Rate Mortgages

There is a good article in today’s Wall Street Journal on the Libor, London interbank offered rate. Why should you be concerned? Many adjustable rates mortgages (ARM) here in the U.S. are indexed to the Libor and despite the Federal Reserve’s recent cut in short term rates, the Libor has continued to rise. The article gives a great explanation on why the Libor has continued to rise and what the consequences might be. If you have an ARM that’s indexed to the Libor, it’s definitely worth reading.

Read the full article here Why Libor Defies Gravity.