Capped Rate Mortgage

This is a mixture of a variable and fixed rate mortgage. An interest rate is charged in line with current prevailing rates, but the borrower is given a guarantee that the rate will not exceed a certain amount. these offers are usually for a limited period of say three years. The advantage to the borrower is their mortgage rate can fall but there is a limit to how high it can rise in the event of mortgage rates generally in the economy turning upwards.

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