Demystify mortgages at Fool.co.uk’s Mortgage Comparison Centre. Get mortgage quotes, gather facts, compare UK mortgages online and enquire with The Motley Fool Mortgage Service.
Capped rate mortgages provide an outer limit on the interest rate you will pay over a given
period of time. While capped rate mortgages tie you in for a set period of time, similar to fixed
rate mortgages, they’re well suited to people who can only afford for their mortgage payments
to rise so far.
With a capped rate mortgage, you benefit if your mortgage lender’s variable rate climbs higher
than the capped rate, and you also get the certainty of knowing your mortgage will only climb so high.
However, if your lender’s variable rate falls below the capped rate, you’ll end up paying
what everyone else is paying. The biggest drawback of capped rate mortgages is the cost of knowing your
mortgage rate will climb so high; capped rate mortgages are usually higher than fixed rate mortgages.
To find out more information visit our Mortgages notebook page.
