# EURIBOR 3 Month Rate & Bank's Prime Rate



## HostBidder (5 Feb 2007)

Can anyone recommend a website that gives the current EURIBOR 3 Month Rate?

How often does this rate change?

What should I consider when comparing two loan offers - one quoted at a certain percentage above EURIBOR 3 Month Rate and the other at a certain percentage above "the Bank's Prime Rate" ?

Thanks!


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## ClubMan (5 Feb 2007)

Does the Wikipedia page on Euribor help at all?


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## CCOVICH (5 Feb 2007)

Euribor changes daily. When calculating interest, the rate for the period will reset according to the terms of the loan (monthly, quarterly, semi-annually etc).


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## HostBidder (5 Feb 2007)

Thanks for responses.  The Wiki link is helpful.

I found the link below with charts of Euribor rates, it looks reliable to me.

[broken link removed]

Can anyone offer any help on;





> *What should I consider when comparing two loan offers - one quoted at a certain percentage above EURIBOR 3 Month Rate and the other at a certain percentage above "the Bank's Prime Rate" ?*


Thanks!


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## ClubMan (5 Feb 2007)

Surely you should be comparing _APRs _when comparing loans?


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## Sunny (5 Feb 2007)

Not sure exactly what you are looking at. Prime rate is a very American term that is the rate the banks in the US charge their best customers which is linked to what it costs the banks to borrow i.e. the fed-funds rate. American mortgages are often based on the Prime Rate.

Euribor is what European prime banks charge other prime banks.


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## crassus (5 Feb 2007)

To the original poster, I suggest that you ask your bank to give you an indication of the last year's prime rate movements compared to the 3 month EURIBOR movements. Then you will be able to compare them. 

As previous posters have stated, Prime Rates are specific to a particular bank and the method of calculating the rate may be made available to you as well. Often, they will track Euribor 1 month but the particular bank can often retain discretion to raise or lower the Prime Rate at their discretion.


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## GreatDane (5 Feb 2007)

Hi

I'd be slow to accept anything, other than either a EURIBOR or ECB rate, as a rate over which a margin will be charged for borrowing money (assumnig your not fixing the rate) - both Euribor & ECB are set outside of the influence of any single commercial bank, so can't be "flexed" up or down, at a lender's descretion.

Prime Rates vary from one Bank, in Ireland to the next, with the formula being difficult to secure and even more difficult, to secure in a loan agreement whereby it became part of the contract.  Just because it indicates a prime position, does not mean it always will be !

Euribor - European Interbank Offer Rate ... is the rate at which one bank lends to another, in Euro's, on the Interbank market in Europe. There are various periods of time for which funds can be borrowed, with the 3 month period being one of the more usual options.

Best of Luck

G>


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## HostBidder (6 Feb 2007)

Thanks everyone for your informative replies.  

I will contact the bank, offering an interest rate based on prime rate, and request that they clarify it or preferably quote a rate in terms of EURIBOR.


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## marksa (6 Feb 2007)

HostBidder said:


> Thanks everyone for your informative replies.
> 
> clarify it or preferably quote a rate in terms of EURIBOR.


 
Definitely - this is like the equivalent in Mortgage terms of the difference between Standard Variable Rate, and ECB Tracker. The former is opaque, fuzzy in reset, and prone to wider margin. The latter on the other hand moves in tandem with the widely published and transparent ECB repo rate. Make sure that you look at what the all-in rate is when comparing the two, not just what credit margin they are applying, as you can be pretty sure that the base-line rate for Prime will be higher.

With Euribor, you know exactly what you get. One thing to bear in mind with Euribor, is that you probably will not be allowed make lodgements, or additional drawings during the relevant period as it is like a mini-fixed rate loan for a set period (in this case 3 Months), whereas Prime usually does allow you ad hoc random adjustments to the amount. You usually will pay dearly for this flexibility though. If you are quite sure of your cashflow needs over the period, go with the Euribor in my opinion.

Final point, why not check out 1 month Euribor if you are looking for some degree of flexibility.


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## GreatDane (4 Mar 2007)

Hi Marksa

I thought the 1 and 3 month Euribor rates were both considered "variable", infact all up to 12 month Euribor were treated as "variable" so there was no penalty for early repayment ?

Thanks

G>


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