Can the Libor rate go down, and if so will my mortgage payments drop?

Answer 1

LIBOR isn't the same rate that mortgages are calculated on.... as you would appreciate if you saw the different rates applicable to individual mortgages form individual companies.

LIBOR is the London Inter Bank Rate, an interest rate applied to loans between banks in London.

However mortgage rates reflect the underlying LIBOR rate, so theoretically mortgage rates should drop in roughly the same manner as LIBOR, but they will always be slightly higher than LIBOR, unless you have some medium to long term fixed interest rate whcih was fixed prior to the LIBOR rate rising

Answer 2

What type of Mortgage have you got ?

If it's an Index Tracker, chances are, it "tracks" the BoE "Base Rate" (5.5% as of 1pm today) NOT the Libor rate.

If it's any other type, then when BoE reduces the Base Rate, 'maybe' (a Mortgage on the 'standard rate' depends on the what the Bank / Building Society decides to do .. chances are, they are so short of cash right now that they won't drop mortgage rates for some time (if at all))

NB> A Base Rate tracker is usually Base Rate PLUS some extra fixed %..

[Yes, I know Libor rate rate trackers DO exist, they are just very unsual]