Capped Rate Mortgages
This type of mortgage is considered to offer all the benefits of the fixed rate and variable rate mortgages.
You’ll set a maximum interest rate, which will be the limit you’re willing to pay over a period of time. Yet this type of mortgage also allows your interest rate to drop if the variable interest level falls. Therefore, you can both benefit from falling interest rates, and protect yourself if they rise.
However, the interest rate you’ll be paying is likely to be higher than with a fixed or discounted rate mortgage. Also, prepare to pay the lender a fairly steep admin charge for this type of mortgage.
