Guide to Capped Mortgages

Similar to a Fixed Rate Mortgage is a Capped or Collar Mortgage

This is a combination of a fixed and variable mortgage. It means that if the bas rate rises your mortgage rate won’t go above a certain level. However if the base rate falls you can benefit from a reduction in your interest payments. Sometimes these capped mortgages have a lower ceiling as well as an upper ceiling. They seem attractive because it enables a cap on interest payments enabling budgeting, whilst also enabling lower payments if rates do fall. However a lender is likely to charge a premium to make this type of mortgage worthwhile for him.

See also Fixed Mortgages

 

 

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Types of Mortgages UK

1. Variable Mortgage

2. Fixed Rate Mortgage

3. Capped Mortgage

4. Self Certification Mortgage

5. Cashback Mortgage

6. Flexible Mortgages

7. Current Account Mortgage

8. Interest Only Mortgage

9. Offset Mortgage