Capped Mortgage Rates

A Capped Mortgage Rate operates exactly like a fixed rate except the interest rate can fall in line with standard variable rates should they come down below the agreed "cap". As with a fixed rate mortgage, the borrower is protected from sharp or unexpected rises in payments but has no risk of losing out should interest rates fall. The borrower should be cautious of very low, short term capped rates as they are unlikely to see variable rates trigger a decreased payment and they will potentially suffer a payment shock when reverting to the Lenders standard variable rate.

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