Capped Rate mortgages
Capped rate mortgages are in fact very much a variable rate mortgage, however they have an important difference. The interest rate you pay is restricted or capped from going higher than a set limit.
A capped rate mortage is normally set for a certain length of time between 2 and 5 years. After this period is concluded you will be returned to the standard variable rate mortgage.
A capped mortgage works by promising you that should interest rates sky rocket you will only ever pay a set amount as agreed with your lender.
This means you can be sure that your mortgage payment won't rise above a certain level. But unlike a fixed rate mortgage should the variable rate fall your payments will most likely fall as well.
With a capped rate you get the benefit of a fixed rate if the interest rates rise too high and a variable rate if interest rates fall.
You do need to know that capped rate mortgages do tend to demand a higher variable rate than a lot of the best tracker rate mortgages. This is not surprising when you consider you are paying for the peace of mind provided.
As with all mortgages a capped rate mortgage is not straight forward and may have other aspects that you would like to discuss that are not covered here. So please get in touch with us so we can keep you up to date with all the elements of a capped rate mortgage.
For Solicitors we act as introducers only
FCA does not regulate Solicitors
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBTS SECURED ON IT.
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