LIBOR Rates

LIBOR Rates are near decade highs

Chart of LIBOR Rates from 1993 to 6/24/23

When rates were high and falling, I used to get hybrid loans that were fixed for one to five years then variable for the next 30 years. 

Back when rates were under 4% for 30-year loans, I recommended replacing these risky, variable rate loans with fixed rate loans.

In 2011, I ate my cooking and refinanced my 30 year LIBOR plus 1.25% loan with a 15-year, fixed rate mortgage at 3.375%. For a few years, LIBOR kept falling and it would have been cheaper to stay with the variable loan but now I'm paying less than inflation, the cash to pay it off is in Series I bonds making inflation plus as much as 3.0%

As this article notes, LIBOR was phased out in 2021 for setting loan rates.

From Wikipedia 

The London Inter-Bank Offered Rate is an interest rate average calculated from estimates submitted by the leading banks in London. Each bank estimates what it would be charged were it to borrow from other banks. It is the primary benchmark, along with the Euribor, for short-term interest rates around the world. Libor was phased out at the end of 2021, and market participants are being encouraged to transition to risk-free interest rates such as SOFR and SARON.

As of late 2022, parts of it have been discontinued, and the rest is scheduled to end within 2023; the Secured Overnight Financing Rate (SOFR) is its replacement. 

Libor rates are calculated for five currencies and seven borrowing periods ranging from overnight to one year and are published each business day by Thomson Reuters. Many financial institutions, mortgage lenders, and credit card agencies set their own rates relative to it. At least $350 trillion in derivatives and other financial products are tied to Libor.

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More about Series I Bonds

• Composite Rates for Older Series I Bonds
  
  
• Current iBond Rates     
  
  
• Historical iBond Rates

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