Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.What's Libor?
It's the London Interbank Offered Rate, but everyone knows it as Libor. It's the interest rate that lenders pay to borrow from each other.
This is the rate that Barclays has been fined £290m for rigging?
That's it. The US Commodity Futures Trading Commission said the bank had acted "in its own self-interest by attempting to manipulate these rates for profit".
Is that relevant to me?
Yes. Libor affects mortgage rates, particularly short-term trackers. Rather than using the base rate to price trackers, lenders use Libor because it looks to the future. So the three-month Libor is based on the expected base rate of the Bank of England in three months' time.
How does that affect mortgages?
Lenders often raise the cash they use for mortgages on the Libor market. They then add charges to cover risk and admin before setting the mortgage rate they offer customers. When rates rise, that's often because Libor has gone up, rather than base rate.
Does Barclays' activity mean I may have paid extra for my mortgage?
It's unlikely. The FSA says there were only attempts to rig interest rates rather than actual rigging. However, Which? says that if people have lost out, banks should compensate borrowers.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments