Capped mortgages 're-entering market'

04 August 2010

Written by Gavin Elley

More lenders are set to reintroduce capped mortgages as the likelihood of interest rates rising increases, one expert has said.

The home loans allow customers to make repayments at a variable rate up to a fixed limit.

Ben Wilkie, editor at What Mortgage, commented that an increase in mortgage products "is always good news", while capped deals are suitable for people who are able to pay more up front.

He said that they are not the least expensive home loans on the market but were in demand around three or four years ago before they became less available.

"I think that once people start to think that interest rates will go up, they will become more popular," the expert explained, adding that some borrowers are attracted by the assurance that their rate will not exceed a certain level.

One of the providers that currently offer a capped mortgage deal is Coventry Building Society, while Mr Wilkie expects the home loans to become increasingly available.

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