A Libor Mortgage is short for the London InterBank Offered Rate, the interest rate offered for U.S. dollar deposits by a group of large London banks. There are actually several Libors corresponding to different deposit maturities. Rates are quoted for 1-month, 3-month, 6-month and 12-month deposits.

Your loan's margin, which can be found in your loan documents, is added to the current LIBOR index value to obtain your interest rate. The LIBOR index value changes monthly, as economic conditions change. Therefore, an adjustable rate mortgage (ARM) loan that is tied to a LIBOR index, changes monthly as well.

A Libor mortgage is an adjustable rate mortgage (ARM) on which the interest rate is tied to a specified Libor.

LIBOR index is used as part of calculating the Adjustable rate payment. ARM mortgages are characterized by their index and limitations on charges (caps).

The LIBOR index is used for most subprime ARM loans.

The LIBOR index is a very popular option arm and hybrid or fixed pay option arm index

LIBOR indexes are also found in Jumbo and conforming type loans.