capped rate mortgage
A capped rate mortgage puts a limit on the interest rate that you have to pay.
Whilst it is likely that you will have to pay an early repayment charge for repaying your mortgage during the capped rate period, you gain the security of having a 'ceiling' or upper limit to the amount that the lender can increase the interest payable on your mortgage.
This period of capped interest is for a specified period only; typically between one and five years. Thereafter, your mortgage will usually revert to the lender's variable rate.
Some capped rate mortgages also have a 'collar' or lower limit below which the interest on your loan cannot fall.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee of between 0 - 1.50% for mortgage advice. The precise amount will depend on your circumstances and may be waived subject to certain conditions.
