Interbank Rate

On my mortgage was on a 2 year fixed ARM. Now my 2 years is up and ARM will kick in. I received a letter saying they will use the index rate for London interbank payment. Does anyone know where it is and how to calculate it?

For variable rate loans, your rate is determined by two factors.

1. The index, which in your case is the London interbank market, also known as the LIBOR index (You'll need to check your notes to see if you are on the 1,3,6 or 12 months). You can find the current rate by looking at Bankrate.com.

2. Your margin (you can find this note you signed.

Simply add these together and this will determine your interest rate.

For example: The 6 LIBOR is at 5.3817 today, if your margin is 1, add these and your rate is 6.3817%

Also located on your grade will be limits to the floor and the ceiling of your rate adjustments for the first change and the duration of the loan. It will also show the CAP limitation adjustment.