Capped rate mortgages have a set upper value for their interest rates. Interest rates cannot go higher than this level, no matter what the changes in the mortgage lender’s standard variable rate (SVR). Capped rate mortgages still allow savings below this capped level but they provide peace of mind to any unexpected spikes in interest rates.
Due to this protection, however, capped rate mortgages tend to have less favourable rates than other types of mortgage that follow the STV.
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