LIBOR is a widely used benchmark or reference rate for short term interest rates. LIBOR stands for the London Interbank Offered Rate and is the rate of interest at which banks could borrow funds from other banks, in marketable size, in the London interbank market. For the average person, LIBOR is important because it often serves as the base rate for adjustable rate mortgage products - including some reverse mortgages.

Although there are LIBOR rates for various terms(3-month, 6-month, 1-year), the most commonly used for mortgages is the 6-month LIBOR. For example, the proprietary reverse mortgages offered by Financial Freedom use the 6-month LIBOR (plus margins) for both the initial rate and the lifetime rate on the loans.

This Fannie Mae website provides an historical review of actual LIBOR rates.

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