Capped

This mortgage falls some way between fixed rate and variable rate mortgages giving you the best of both worlds.

Whilst your payments will go up and down in line with interest rates, the maximum rate you will pay is restricted to an upper limit or ‘cap’ with some lenders also imposing a the lower limit or ‘collar’ to prevent the interest rate dropping below a specified level. These upper and lower limits are usually specified at the outset and agreed for a certain amount of time.

If interest rates go down once your mortgage has started your payments will go down too.

Whilst your mortgage payments could also go up, you know at the outset the maximum they can go to, making it easier to budget.

Charges are likely to apply if you want to repay all or part of your mortgage balance during the capped period, although some lenders are happy for you to make limited lump sum reductions or even transfer the mortgage to a new property if you want to move house.

There are currently very few capped mortgages available in the market place.

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Mortgage Types

Your home may be repossessed if you do not keep up repayments on your mortgage.

Sherwood Financial Solutions Limited t/a equate. Registered office address The Turbine, Coach Close, Worksop, Nottinghamshire, S81 8AP.
Registered in England. No: 05038055
Tel: 0800 0380098 • info@equatemortgages.co.uk
equate is a trading style of Sherwood Financial Solutions Ltd, an Appointed Representative of H L Partnership Ltd. which is authorised and regulated by the Financial Services Authority. H L Partnership Ltd. is entered on the FSA register (http://www.fsa.gov.uk) under reference 303397.
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