Finance House Base Rate (FHBR)

Finance House Base Rate (FHBR) is 1% for January 2017

The rate is calculated at the end of each month by averaging the cost of three-month money in the interbank market over the previous eight weeks. The resulting figure is then rounded up to the next half point. The process is entirely arithmetical and contains no discretionary element. FHBR is calculated on the last Friday of each month and the resulting figure becomes effective from the first day of the following month. It is published daily in the financial press and remains unchanged until the calculation produces a different figure.

The rate provides member companies of the Association with a base on which to calculate lending charges in certain industrial and commercial contracts where it is appropriate to vary rates during the period of the agreement. It is used, for example, in banking type transactions as well as in connection with stocking loans to dealers. It is also widely used by non-FLA members.

FHBR is intended as a benchmark only. FLA members are free to use FHBR as a benchmark, but are also free to calculate their own interest rate. If FLA members choose to use FHBR, the interest rate payable may be expressed as “X% per annum over or under the Finance House Base Rate”.