Capped Rate Mortgage
A halfway house
A rare option currently
A Capped rate mortgage offers a maximum rate of interest that your mortgage rate cannot increase above 'the cap'. It also allows you to benefit from rate reductions should the Lender reduce their variable rate. Because of its halfway house stance, capped mortgages tend to suit those who can cope with the payment fluctuations of a variable rate but who are also concerned about interest rates rising too high. They do offer some security and can be a compromise for those torn between a fixed rate mortgage and a variable rate mortgage. However, you may find yourself paying a higher interest rate as the upper limit for the Capped rate is usually higher than the rates set by Lenders for their Fixed rate offerings. So at best a poor compromise!
Disclaimer
James Raynor is Authorised and Reulated by the FSA (463141). You may be charged a fee for the processing of your application and this fee and we estimate that this fee will be £195. Your Home is at risk if you do not keep up the repayments of a Mortgage or any other loan secured against it.
