Common
terms & definitions
 APR
APR stands for the Annual
Percentage Rate. Useful for comparing interest rates between
banks.
Base Rate
The base rate is a rate of interest
set by the Bank of England. This is the interest rate the
Bank applies to money it lends
to other Banks and financial institutions. All interest rates
are based on this figure, as this is the minimum return a
bank needs to earn in order to pay it's own debts to the
Bank of
England.
LIBOR
LIBOR stands for London Interbank
Offered Rate. The LIBOR is the standard created by the
British Bankers Association to
determine short term interest rates, announced to the
market at 11am every banking day. This is the rate of interest
at
which London banks borrow money from each other. The
LIBOR changes daily; currently the average rate is at 3.7%.
SVR
SVR (Standard Variable Rate) refers
to the rate that fixed rate mortgages return to after
a defined period
of fixed interest
has elapsed..
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