Capped mortgages offer an interest rate that can fluctuate but will not exceed a set upper limit, or cap. This type of mortgage provides some protection against rising interest rates while still allowing borrowers to benefit from rate decreases. The cap ensures that your monthly payments will never go above a certain amount, offering a blend of security and flexibility. Once the capped period ends, the mortgage usually reverts to the lender’s standard variable rate.
Balancing Protection and Potential
Capped mortgages offer protection against large interest rate increases while allowing borrowers to benefit from potential interest rate reductions.
Peace of Mind in Uncertain Times
Capped mortgages can provide peace of mind for borrowers who are concerned about making higher monthly payments in the event of interest rate increases.
Weighing the Costs
Capped mortgages can provide peace of mind for borrowers who are concerned about making higher monthly payments in the event of interest rate increases.
Early Repayment Considerations
Capped mortgages may come with early repayment charges if the borrower wants to pay off the mortgage before the end of the capped period.
Rarity in the Market
This type of mortgage is rare nowadays.