What is the Finance House Base Rate (FHBR)?
FHBR (Finance House Base Rate) refers to a rate historically calculated and published by the FLA (Finance and Leasing Association) which has been used across the Asset Finance market including Aldermore as a contractual reference rate to determine the level of interest charged to customers.
How is it calculated by the FLA?
FHBR is calculated by the FLA on a monthly basis by averaging 3 month Sterling LIBOR over the previous eight weeks, with the resulting figure then rounded up to the next half point. The process is entirely arithmetical and contains no discretionary element. It is calculated on the last Friday of each month and the resulting figure becomes effective from the first day of the following month.
What is happening to FHBR?
Following the introduction of the EU’s Benchmark Regulation, the FLA has confirmed it will not become an authorised benchmark administrator and as such the FLA will cease to publish FHBR.
What does this mean for you?
As your agreement with Aldermore references FHBR, we will calculate and publish an equivalent rate ourselves using the same method currently used by the FLA. This will result in an identical rate of interest and there will be no impact on the cost of your financing agreement.