Capped mortgages may seem a great idea - but interest is staying put | Money | The Guardian

Capped mortgages may seem a great idea - but interest is staying put | Money | The Guardian

You are looking for a mortgage. You want to benefit from the current low interest rates, but equally, you would like some protection from possible future rate rises. However, you are not sure about tying yourself to a fixed rate for a few years. This is where a capped rate comes in.

Financial data provider Moneyfacts this week revealed that in the past two years the number of capped-rate mortgage deals on the market has increased from just one to 39. The Woolwich (the mortgage arm of Barclays) and First Direct are among the major lenders currently offering them.

Capped-rate mortgages work in a similar way to variable-rate deals, but have a ceiling, or cap, above which the rate cannot go during the offer period.