Cheer for borrowers as Libor dives 1%

The rate at which banks lend to each other, known as Libor, is crucial in determining the cost of mortgages for customers, and the fall may result in cheaper borrowing. Three-month Libor, the main rate which determines tracker mortgage costs, has fallen by over 1% from 5.56% to 4.49% today. The rate for overnight funds fell 0.78% to 3.21%. The news will bring some cheer to homeowners as previous reductions in base rate have had little impact on borrowing costs as banks became nervous about lending to each other. Yesterday, the Council of Mortgage Lenders said Libor was more important in...