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LIBOR Mortgage |
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Lowest rates from over 50 lenders displayed:
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| Loan Name |
Rate |
Pts |
APR* |
As of |
| LIBOR Year 5/1 |
4.62% |
2.0 |
4.87% |
2007-09-19 |
| LIBOR Year 3/1 |
4.12% |
2.0 |
4.38% |
2007-09-19 |
| Stated LIBOR Year 3/1 |
5.25% |
3.0 |
5.5% |
2007-09-19 |
| Stated LIBOR Year 5/1 |
5.5% |
2.0 |
5376.0% |
2007-09-19 |
| Jumbo LIBOR Year 5/1 |
6.625% |
2.0 |
6.88% |
2007-09-19 |
Two loan programs that are popular are the 3 Year LIBOR Mortgage and 6 Month LIBOR Mortgage.
The 3 Year LIBOR Mortgage is popular because it allows you to fix the rate for the first three years of the mortgage. The interest rates are incredibly low, oftentimes in the 3% range, and there are caps on these loans so the interest rate can only increase up to a maximum of 5% or 6% above the starting rate. A great program for the borrower looking to minimize the monthly payment while still securing a fixed rate on your interest and not risking negative amortization. Also, these loans typically come without a prepayment penalty so you can refinance later if you think the rates are rising too quickly.
3 Year LIBOR Mortgage
The 6 Month LIBOR Mortgage is popular because provides you with the ultimate in low monthly payments. Rates on these programs are in the 2% to 3% range, and because of the interest only feature, a monthly payment that is incredibly low. The risk with these loans is that the rates will rise, but in most cases you are protected by a 6% cap over the start rate, so if you start at 2.5% then the worst case scenario is 8.5%, and that’s not so different than the 30 year fixed rates in the 6% range. All in all, it’s a good loan for the long or short term holder willing and able to take the risk of a changing monthly payment. This loan requires good credit and is not available to all borrowers.
6 Month LIBOR Mortgage
Here's an example: Let’s say you are looking to buy a house and you think that the 3 Year LIBOR Mortgage provides the right match to your needs for low monthly payments and you are comfortable with the 3 year fixed rate period. If you are buying a house for $100,000, and your interest rate is 6.0% on a regular 30 year fixed , your interest rate on a 3 Year LIBOR Mortgage might be 4.0%. The payment for the regular 30 year fixed, not including taxes and insurance, would be $599.55 but your payment for the loan would be $333.33 per month. A savings of almost 45% off the regular 30 year fixed payment. Add to that the tax benefits of owning a home, which can be calculated by taking your total annual payments on the mortgage and calculating how much in taxes you would save if you didn’t have to pay taxes on that amount of income. So, if your monthly payment is $333.33 and your annual payment is $3,996, that’s $3996 of annual income that you don’t have to pay taxes on. If you are in the 40% tax bracket, then that’s $1,600 of savings per year on your tax bill, or $133.33 per month of tax benefits. Subtract $133.33 from your monthly payment of $333.33 and you have a $200.00 monthly payment for your $100,000 new house, including the tax benefits but not including taxes and insurance. Our Current LIBOR Rates
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