Capped Rate Mortgage
Capped Rate Mortgages
With a Capped Rate Mortgage, the interest rate can go up and down in line with movements in the lender’s Standard Variable Rate, but cannot go above a set upper limit, known as the “cap” or “ceiling”.
This type of mortgage can also have a set lower limit, known as the “floor” or “collar”. For these types of mortgages, the interest rate can move between these limits but cannot fall below the collar or go above the cap.
Note that this product may carry an early redemption charge.