This is a daily index based on the interest rate banks choose to lend funds to other banks in the London wholesale market.
LIBOR rates can range in adjustment windows from an initial fixed period of 1 month to as longs as 5 to 10 years. Generally, the initial rate is fixed for some period of time (6 months or more) and then the rate will then continually adjust periodically, after this period of time.
If you're mortgage shopping, and you state you want the lowest rate in the market for an ARM (adjustable rate mortgage), it is a good chance your loan will be tied to this index, for periodic adjustments.
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