Although many mortgage companies base their interest rates on the Federal Prime Rate, Chase Home Finance bases their mortgage interest rates on the London Interbank Offered Rate, also known as the LIBOR.
This rate increases or decreases based on the interbank market of London.
The London Interbank Offered Rate (LIBOR) is the average of the rates which the highest-rated banks in England would charge to borrow money from each other.
The LIBOR - which stands for the London Interbank Offered Rate - usually follows the Federal Funds Rate fairly closely.
At what rate do you think interbank term deposits will be offered by one prime bank to another prime bank for a reasonable market size today at 11am?