Finance Articles

What is a Capped Mortgage?

A capped mortgage is a variable rate mortgage with a capped limit beyond which the rate paid will not exceed.

Mortgages are available in a number of different interest rate options, one of which is the capped rate.

A cap means that there will be a limit to any increase in the variable rates for a selected term. The mortgage rate charged on your account can not exceed this rate. However if the variable rate drops below your capped rate you will benefit, as your repayments will be calculated using the lower variable rate. Capped mortgages enable you to place a limit on your monthly mortgage commitments and still benefit from falls in interest rates.

Capped rate mortgages put a limit on the highest rate of interest you will have to pay on your mortgage over an agreed introductory period. This means you're protected to a certain extent if interest rates rise, and if they stay low you will still benefit from the lower interest rates. It's basically a combination of the fixed rate mortgage concept with a standard variable rate mortgage, allowing you to profit from decreasing interest rates.

A capped rate mortgage is a variable rate mortgage which has a fixed upper rate limit. This means that the borrower knows in advance the highest monthly payment that he may have to make.

One advantage of the capped rate mortgage is that when interest rates are likely to rise, they offer protection for borrowers against repayments going over a certain level. This can be seen as being almost as attractive as a fixed rate mortgage. Having a capped rate mortgage can make it easier to budget when you know what the highest amount your mortgage payment could be.

Be aware that this type of mortgage usually charges redemption penalties to those who wish to swap mortgage provider.

Capped rate mortgages are generally a compromise between fixed rate and variable rate mortgages.

Whilst providing peace of mind capped rates are generally more expensive than fixed or discounted rate products.

You may freely reprint this article provided the author's biography remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

What are the Top 11.5 Criteria for Selecting an Orlando Investment Property
1. Make sure units are larger than 1800 square feet.

A Guide to Banking for Students
A bank serves as a financial institution, providing complex financial services, right from the maintenance of deposits to extending credit. A little guidance and initiative help students to improve their personal credit record.

Get Your Life Back With Reverse Mortgage Association
As you get older the options for you to earn income become increasingly limited. However, just because you retire and switch your source of income to social security, your invested savings or a 401K you established while working does not mean that you have to live a life of abject frugality or poverty.

Not Only Mortgage Interest Rates Affect Your Payment
We all keep a close eye on mortgage interest rates when shopping around for a mortgage. After all, the interest rate on your mortgage has a dramatic effect on your monthly payment. Even a small difference in your mortgages interest rate can have a large impact over the life of your mortgage.

Investment Strategy: The Investor's Creed
Fascinating, isn't it, this stock market of ours, with its unpredictability, promise, and unscripted daily drama! But individual investors are even more interesting. We've become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that four-letter word, certainty. We are a culture of investors where hindsight is rapidly replacing the reality-based foresight that once was flowing in our now real-time veins... just like downhill racing, grouse hunting, and Super Bowls.

REIClub.com Presents Free Teleseminar With Real Estate Investment Expert Kendra Todd on September 13, 2007.
REIClub.com presents free Teleseminar with real estate investment expert Kendra Todd on September 13, 2007.

Home Mortgage And Our Age
Home mortgage refers to the document borrower signs that gives the lender a right to take possession of the property if the borrower fails to pay off the loan.

How to Finance a New Kitchen?
Want to improve the look of your property? Want to add value to your property?Been dreaming of a brand new kitchen? Do not have readily available cash to pay for it?Are you planning an extension to your home, a new kitchen, would you like to have double glazing, a new conservatory, patio, or a new heating system, or are you undertaking the general up keep of your home but finding it hard to pay for?Why not consider a Home Improvement Loan. Make the dream become reality with a UK Home Improvement Loan.

Obelisk International Announces the Launch of its Latest Investment Venture at Seven Lakes, Bulgaria
Obelisk International is proud to announce the launch of its latest eco-friendly project at Seven Lakes, Bulgaria in collaboration with the CarbonNeutral Company.

John Sauro of North Atlantic Mortgage on News 12 CT TV March 3, 4, 2007
John Sauro of North Atlantic Mortgage on News 12 CT March 3, 4, 2007. Mortgage Expert to Discuss New Audio Book, Inside the Mortgage Market, Tips for Buying and Refinancing Real Estate

Need College Expenses? - Try Refinancing Your Mortgage
Having someone in your home that is going to college certainly does put an extra pinch on the finances. This could make it difficult for the student as well as the parents. If you have lived in your home for a while, though, by refinancing your mortgage you could get access to your equity. This would give you a low cost loan that could pay your student?s way through his or her college years - and it may even allow you to reduce your monthly payment, too.

DeSilva+Phillips, Media Investment Bankers, Announces 'October 2007 Healthcare Media M&A Summit'
DeSilva + Phillips, media investment bankers, announces a major conference on deal-making in the healthcare communications and information market -- The DeSilva + Phillips Healthcare Media M&A Summit. The full-day event will be held on October 4, 2007, at the New York Academy of Sciences in New York City.

Why An IRA May Be The Perfect Investment Vehicle
Individual Retirement Accounts, known as IRA's, are basically a savings plan for retirement. Created by the government in 1981, the IRA was designed to help individuals save money and provide them with an incentive to put  money aside for their retirement. When the IRA was released, it offered tax advantages to those who chose to participate in this new style of investment vehicle. During the years since its inception, the IRA has gone through a number of changes that have impacted its inherent tax advantages and the eligibility of those who would participate. This article offers a brief overview of how today's IRA's work and why they may still be the perfect investment vehicle for your retirement.Benefits Of An IRAThe prim...

Investment Strategy: Contrarian Investing 101
Have you ever wondered why some people are able to invest in any financial instrument or property at a low price and why you have always missed the boat? This article explains the importance of understanding why contrarian investing works and how having such a mindset can help you make more money as part of a larger investment strategy.