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Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
A capped mortgage is similar to a fixed rate in that it will not rise above a pre-set rate, known as the cap.
However if the lenders standard variable falls below the capped rate your rate will fall in line with it. If the lenders variable rate rises above the capped rate your rate will not rise above the capped rate.
Many capped rate mortgages will have a minimum rate they can fall to known as the collar. As one of the main benefits of a capped rate mortgage is your mortgage payments reducing as interest rates fall, it is important to check the small print of a capped rate mortgage scheme.
