Capped Mortgages
Capped mortgages are similar to a fixed rate mortgage in rhe respect that the interest the rate cannot rise above the cap but can vary beneath the cap. Sometimes there is a collar associated with this type of rate which imposes a minimum rate. Capped rate are often offered over periods similar to fixed rates, for exapmle 2,3,5 years.
The benefit of the cap is that it guarantees that your monthly payments will not go above a certain amount, within a defined period. However, if interest rates fall then your mortgage payments can reduce also.
Capped mortgages often suit those who can manage with the fluctuations of a variable rate, but are also concerned about interest rates increasing. They offer some security for borrowers as they guarantee if rates do rise they will not go beyond the agreed Capped Rate. Equally if rates drop you could benefit from lower monthly payments.
With this type of mortgage you effictively have the best of both worlds. Offering a guarantee of a maximum monthly payment, with the potential to see your repayment fall in line with declining interest rates. You could pay a premium for it though.
At North Mortgages our Mortgage Experts will take care of everything on your behalf. Remember, we source mortgages from the whole of the market, so you know your getting the best deals available and all tailored to suit your personal circumstances.
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