Capped Rate
Mortgages
Find Today's Leading
Capped Rate Mortgage. Compare Capped Rate
Mortgages.
A capped rate mortgage is a variable rate
mortgage which has a fixed upper rate limit (the
cap). This means that the borrower knows in advance
the highest monthly payment that he may have to
make. For example, if a cap rate is fixed at 6% ,
the loan will be charged at the prevailing variable
rate as long as this is not more than 6%. Capped
rate mortgages are generally a compromise
between fixed rate and variable rate mortgages.
The advantages of the capped rate mortgage is
that when interest rates are likely to rise, they
offer protection for borrowers against repayments
going over a certain level. This can be seen as
being almost as attractive as a fixed rate mortgage.
Having a capped rate mortgage can make it
easier to budget when you know what the highest
amount your mortgage payment could be. Having a
capped rate can also allow you to enjoy the benefits
of any cuts made to the lender's standard variable
rate (SVR). Whilst providing peace of mind capped
rates are generally more expensive than fixed or
discounted rate products.
There are a number of companies who offering
competitive Capped Rate Mortgages. Remember to
compare different lenders, and always seek
professional financial advice. Use our free
Mortgage
Calculators can help you to compare the
different capped rate mortgages on offer.
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