With the fed rate at 1.5 why is Libor at 4.75? B of A is saying their mortgage rate is 6.5%, that seems really high to me considering the feds are probably going to cut another .25 Anybody know why there is a 3point difference between Fed and Libor?
tk – The LIBOR is an inter-bank rate. When banks are afraid of loaning to each other (i.e. they feel there is some risk the other bank will default on the loan), they must demand higher interest rates to make up for the higher risk.
The Fed rate is not a market-based rate. The Fed sets it.
The LIBOR is more of a market-based rate and is based on banks perceived risk of loaning to each other.
tk – The LIBOR is an inter-bank rate. When banks are afraid of loaning to each other (i.e. they feel there is some risk the other bank will default on the loan), they must demand higher interest rates to make up for the higher risk.
The Fed rate is not a market-based rate. The Fed sets it.
The LIBOR is more of a market-based rate and is based on banks perceived risk of loaning to each other.
tk – The LIBOR is an inter-bank rate. When banks are afraid of loaning to each other (i.e. they feel there is some risk the other bank will default on the loan), they must demand higher interest rates to make up for the higher risk.
The Fed rate is not a market-based rate. The Fed sets it.
The LIBOR is more of a market-based rate and is based on banks perceived risk of loaning to each other.
tk – The LIBOR is an inter-bank rate. When banks are afraid of loaning to each other (i.e. they feel there is some risk the other bank will default on the loan), they must demand higher interest rates to make up for the higher risk.
The Fed rate is not a market-based rate. The Fed sets it.
The LIBOR is more of a market-based rate and is based on banks perceived risk of loaning to each other.
tk – The LIBOR is an inter-bank rate. When banks are afraid of loaning to each other (i.e. they feel there is some risk the other bank will default on the loan), they must demand higher interest rates to make up for the higher risk.
The Fed rate is not a market-based rate. The Fed sets it.
The LIBOR is more of a market-based rate and is based on banks perceived risk of loaning to each other.
Does that mean B of A is not liquid! Do they have to borrow money in order to loan money to me. Maybe I should look for a more liquid source. Does anyone know which banks have the highest cash reserves, seems like as long as I’m not a credit risk I would get the best rate from them, as an aside I have never liked B of A or Wells Fargo for that matter.
Does that mean B of A is not liquid! Do they have to borrow money in order to loan money to me. Maybe I should look for a more liquid source. Does anyone know which banks have the highest cash reserves, seems like as long as I’m not a credit risk I would get the best rate from them, as an aside I have never liked B of A or Wells Fargo for that matter.
Does that mean B of A is not liquid! Do they have to borrow money in order to loan money to me. Maybe I should look for a more liquid source. Does anyone know which banks have the highest cash reserves, seems like as long as I’m not a credit risk I would get the best rate from them, as an aside I have never liked B of A or Wells Fargo for that matter.
Does that mean B of A is not liquid! Do they have to borrow money in order to loan money to me. Maybe I should look for a more liquid source. Does anyone know which banks have the highest cash reserves, seems like as long as I’m not a credit risk I would get the best rate from them, as an aside I have never liked B of A or Wells Fargo for that matter.
.
