One of the biggest decisions people have to make when buying a mortgage or remortgage product is deciding between fixed rate and variable interest options. However, capped rate mortgages and remortgages can offer the best of both worlds by offering a loan that acts like a variable interest rate mortgage, but is guaranteed not to go above an agreed percentage rate.
There are both advantages and disadvantages to capped rate mortgages and remortgages. The main advantage is that you have the security of knowing that your monthly repayments will not rise above a certain level but you can, at the same time, benefit if interest rates drop.
However, this luxury does come at a premium. You can generally expect to pay a higher interest rate on a capped rate mortgage or re mortgage than you would for a variable interest rate one. Also, many lenders charge an extra set up fee of as much as £200 for their capped rate mortgages and remortgages.
Popularity: 2% [?]
![[del.icio.us]](http://images.del.icio.us/static/img/delicious.small.gif){kind=small}
Be The First To Comment