Mortgage Customer LIBOR Transition FAQs

LIBOR for many years has been used as a key interest rate benchmark across a wide range of financial products globally, including some mortgages. However, the FCA has made clear that at the end of 2021, representative LIBOR rates will discontinue across most currencies.

An estimated 200,000 LIBOR-linked mortgage contracts are held by UK Finance mortgage members, valued at £30 billion, all of which need to be transition away from LIBOR by the end of 2021. As lenders globally work to move customers onto safer and more transparent benchmark rates, it is important that borrowers can understand the impact of transition and the reason behind the change.

UK Finance with the support of TLT, has developed a ?Frequently Asked Questions? document for retail mortgage customers on LIBOR transition. Lenders will be reaching out to affected customers throughout the year and the FAQ provides key definitions and answers to pressing questions customers may have on the reasons behind transition and the impact it could have, including:

  • Why is LIBOR ceasing?
  • What does this mean for me?
  • Am I going to pay the same amount?
  • What is the potential impact?
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