Capped Rate Mortgages

A capped rate mortgage is essentially a combination of a fixed rate mortgage and a variable rate mortgage. For a defined term, you are guaranteed not to pay above a fixed rate of interest on your mortgage. But at the same time, you will benefit if interest rates fall below this level.

Capped rate mortgages are obviously attractive if you suspect that interest rates may rise at some point. They are available for a wide range of terms, ranging from a few months to the length of the mortgage itself.

Capped mortgages are usually more expensive than their fixed rate counterparts. So, there if interest rates did not fall below the capped rate during the term, then you would have been better off with a fixed rate mortgage. There may also be redemption penalties attached to a discounted product, so watch out for these before you sign up.

For more information please click on the type of mortgage you are interested in:

• Fixed Rate Mortgages - A fixed rate of interest over a defined term
• Variable Rate Mortgages - Mortgages at the lenders basic rate
• Discount Rate Mortgages - Promotional discounted rate mortgages
• Capped Rate Mortgages - Combined fixed/variable rate mortgages

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