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What does Libor-linked mortgage mean?
When choosing this sort of mortgage you have to know that the interest rates charge are always subject to correlation with LIBOR, or the London Inter Bank offered Rate. The interest rates you will pay for, usually is a predefined percentage which is higher than the LIBOR, and will always oscillate in correlation with ups or down movements of the LIBOR. There is incertitude linked with the Libor mortgage, as one cannot foresee an exact interest rate movement over a period which might be even 25 years. |