Capped rate mortgages

Capped rate mortgages out a ceiling or cap on the level of interest charged. The rate could vary and go up or down but will not rise above the capped level that has been agreed.

One advantage of a capped rate mortgage is that although it will not go above a certain level it can track the base rate downwards, thus reducing the level of interest charged should the base rate fall.

Another advantage is that like a fixed rate mortgage you know the maximum repayment that you will have to make. However, there are only a limited number of capped rate mortgages on the market and they tend to charge a higher level of interest than you would pay on a typical fixed rate or discounted rate mortgage.

	Clydesdale and Yorkshire Banks bring in lower rate mortgages Banks try to make things easier for first-time buyers
	Clydesdale and Yorkshire cut fees on new fixed rate mortgages The Clydesdale and Yorkshire Banks have announced details of two new fixed rate deals for 60 per cent LTV borrowers and cuts in arrangement fees.
	Accord cut rates on fixed-rate mortgages for FTB's Accord are the latest lender to cut mortgage rates on a range of fixed rate mortgages including deals for first-time buyers.
	First Direct launch three new best-buy fixed rate mortgages Award-winning lender First Direct has unveiled three new mortgage products for borrowers with a 35 per cent deposit that go straight to the top of the best-buy tables.
	Barclays cut rates on fixed rate mortgages Barclays has cut interest rates on three of its fixed rate mortgage products and waived fees for qualifying customers.