What is a Capped Rate Mortgage?

A capped rate mortgage does it exactly what it says on the tin!  Capped rate mortgages are similar to discounted or tracker mortgages except that the amount you pay will have a fixed maximum interest rate (capped rate) that can not be exceeded.

For example:

Say BBR is at 1%. A lender might offer a rate of BBR+2% for a two year period with a cap of 5% during that time. If BBR was 1% the amount you would pay would be 3%. However, if BBR were to increase to say, 4% in that two year fixed period, you would pay a maximum of 5% (and not 4% BBR+2%). 

For more information talk to one of our specialist advisers on 0845 148 9165.