The LIBOR rate hits record low!

Published ¤ 23/05/2009

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The 3 month London Inter Offered Bank Rate (LIBOR) has fallen to its lowest level in history at 1.3%. LIBOR is the rate at which banks lend to one another, and is often used as a guide to longer term fixed rates.

The rate coming down may at last be a sign that longer term fixed rates may eventually begin to drop.
Since the bank base rate hit 0.5%, the best 5 year fixed rates have struggled to get below 4% - a 3.5% margin on the bsae rate. Compare this to a year ago when 5 year fixed rates were around 0.5% higher than the base rate, and you can see that it is about time the banks begun honouring their promise of making credit more available to the consumer.
Paul Skinner at PKS, a truly independent mortgage adviser said "We have seen the banks profiteering from the low bank base rate and relatively high fixed rates for far too long. It is about time they started to offer the consumer real value for money. Now that the LIBOR rate is at an all-time low, maybe, just maybe, we will begin to see signs of the banks playing fair. However, I would not bet on it".
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